Mid-Year Forecast for California's Housing Market - 2021

Home in Alamitos Heights

In his July 28, 2021 Report, California Association of Realtors economist Jordan Levine recapped what's going on the real estate market so far this year:

1. The share of first time buyers is the highest in 10 years, fueled by low, low interest rates--two of every five homes was sold to first time buyers--while there are fewer repeat buyers in the market because fewer current homeowners are selling.

2. First time buyers are also more affluent:  33% of these buyers have 20 percent down payments, or higher, while only 10% are using zero down loans.

3. Vacation and second home sales are highest in four years.

4. The first half of 2020 ended with a 33% increase in home sales, and a 37% decrease in inventory, making a very competitive market for buyers.

5.  Statewide, 71% of home sales closed over asking price.

6. Despite COVID, 20 California cities grew by 40% last year, with Big Bear, Malibu, and Montecito being the top 3.

7. And 30 cities almost doubled in sales growth in 2021 compared to 2020:  Palos Verdes Estates (148%), Signal Hill (109%), South Pasadena (116%), to name several.

8.  The fastest growing sales were in San Francisco area and Southern California as of June 2021.

9. In May 2021, condo sales rebounded almost 160% by June 2021.

However, housing supply and overall affordability continue to be issues, and the need for more housing is still urgent.  Sales are expected to slow, there may be more inventory (which overall is still low) but the median price is not predicted to go down for the remainder of 2021. 

If you're a local homeowner thinking about selling, please contact me for an evaluation of your home, units or condo.

 

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

The Issue of Buyer "Love Letters"

 

In a highly competitive market, what serious buyer doesn't want his/her/their offer accepted?  A growing practice starting on an occasional basis, say, in the 1990s, to an almost constant basis in the more recent market, was for the buyer to accompany an offer with a personal description of themselves, their motivations, possibly their family, which sometimes included photos, all in the effort to obtain the seller's favor over another offer, because the most preferred neighborhood is, for example, the one where the park in the photo is located--there's a great school there, they have friends or family there, any number of reasons.  But this practice, which locally became the norm with offers, gave sellers additional information about the prospective buyer not available just from reviewing an offer alone, along with the issue of  possible unintended bias.  It finally came to the attention of REALTOR professional associations, and ultimately resulted, in California, in an advisory form published in October of 2020, given to both the buyer and the seller, concerning state and federal laws on fair housing and discrimination.  Because how would a buyer really know, especially after viewing photos and other personal history, on what basis a seller was choosing an offer? Sellers are human, and they sometimes have a preference for who they would like to see move into their home. It may not be based on race, it could be based on preferring someone with children, or not.  Personally, I've never liked this practice and never asked my buyers to use it.  The practice is not currently forbidden, but it is officially heavily discouraged in the profession, and I advise my clients to not submit such a "cover letter".  Offers need to stand on their own merits.  There are already enough challenges in the current market, i.e., a buyer needing financing vs. a buyer who can pay all cash.

The Fair Housing and Discrimination Advisory, published by the California Association of Realtors, is a two page form outlining state and federal housing laws, including the protected classes, a reference to the National Association of Realtors applicable Code of Ethics article, and examples of improper housing conduct which violates a protected class or characteristic.  The form also includes examples of positive practices.  These state and federal laws have long been in effect, for years/decades, and are included in a real estate agent's training on a regular basis, but the need to remind all parties involved in a real estate transaction became evident. Additionally, some appraisals have been questioned for similar reasons, read the story about the Oakland homeowner and an appraiser in that area.

If you would like a sample copy of this form, please contact me for more information.

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

California April Sales and Prices, Higher Than Ever

 Inventory, Inventory, Inventory. There's less of it, and yet.... not everything is selling within 7 days. If you are interested in selling or buying and would like more in depth information about the current market in Southern California for residential properties, just contact me via phone or text. 

Why there are fewer homes on the market has more than one possible answer, but this shortage has grown since 2012, back when 6 months inventory was more the norm, not 1.6 months. 

Last September, Long Beach had 2 months supply of homes on the market, in April 2021 it was 1.1 months.  And this is the time of year when we traditionally see much higher inventory.  In the last 7 days, 79 homes and condos came on the market, but 77 closed in the same period, and 120 went into escrow.  So the new listings are not keeping up with the overall sold volume.  

To help the situation for some reluctant sellers, the passage of Proposition 19 can assist for certain age 55-and-over sellers, or disabled, or natural disaster victims, who want to minimize a change in their property taxes if they choose to move.   Or, if you plan on relocating, study in advance the areas that may be economic advantage to move to. And for certain sellers, a purchase with a reverse mortgage can be an option.  Selling first before buying is the most optimal for sellers, but if you  can't, you want to make sure that finding a new property is a #contingency in the contract with the buyer.

Buyers who are willing to accept a property that needs some work that fits in their budget may actually be able to find the right home.  Some of those properties have been sitting on the market for a while longer and without the fierce competition of multiple bids.  And feel free to use the property search tool on the site below.

 For more market information about your area of interest, please contact me via phone, text or email.

 Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Buyers Feeling Squeezed in This Market, or "What is an Escalation Clause"?

With multiple offers, lowered inventory, and 15 minute showings, buyers have been under considerable competition and pressure so far in 2021.  In order to "weed out" the offers, sellers have been making certain requests, or buyers with several times losing out experiences have voluntarily been relinquishing their standard contingencies.  How?  By upping their offer price (even $100,000 over list price), shortening physical inspection time periods (i.e., 17 day to 10 days, or less), removing appraisal contingencies (putting their deposit at risk if they back out over a low appraisal), as examples.  

Another form of competition is an "escalation clause".   This is where the buyer offers, or the seller counter offers, to automatically increase the price by a certain amount, say $1,000, over any other offer. Of course, without any other language added, the buyer could be forced into paying $1,000 over another bidder offering $50,000 over list price--can the buyer really afford that? Well, what if the buyer puts in a "not to exceed" a certain price?  But now the seller know that buyer's maximum bid, and could use it as leverage to obtain higher amounts from other buyers.

If the buyer offers a "floor price" or $1,000 over the highest offer, the buyer may end up paying a higher price if no other offer matches the buyer's floor price.

To not blindly make offers using one of the above methods, the buyer should include language in their offer or counter offer that "the buyer  receive a copy of the highest offer (upon acceptance) and that the buyer has a right to contact that other buyer or their agent to verify that they made a bona fide offer," or words to that effect.

But California Association of Realtors cautions buyers about making offers with escalation clauses, stating that the enforceability of such offers is not 100% assured, and the buyer is advised to obtain legal advice prior to making such an offer.

For a the complete Guide, please contact me by phone or email.

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

A Strong Percentage of Homes Are Selling Above Asking Price

In January, 2021, over 56% of homes statewide sold over the asking price.  This is according to a Southern California April presentation by a California Association of Realtors economist as shown in the slides to the right.

The over-asking statistics may vary in areas, so for example, in a combined look at 180 sales of condos and houses between 4/8 and 4/15 in the 10 cities of Bellflower, Cypress, Harbor City, Long Beach, Carson, Torrance, Lakewood, Lomita, San Pedro, and Signal Hill*:

71% (approx.) or 127 homes out of 180 sold over asking.  

7% (approx.) or 12 homes sold at original list price.

19% (approx.) or 35 homes sold under original list price.

In lower prices starting at $300,000, the increase may be $900 to $15,000; in the $500,000 range the increase in closing price grew in some cases to over $50,000 higher, and in the $1,000,000+ category it may $150,000 higher.  However, one single family home listed in Long Beach for $595,000 recently closed at $700,000. 

For sellers such overbids may help them more easily into their next purchase, but for the huge number of first time buyers looking for opportunity with very low interest rates, there is much frustration. On many properties, multiple offers abound, often 15-20 offers from which the seller may pick, sometimes outright, sometimes countering back to a select group of buyers.

In a March 2021 Google Consumer poll, 64% of sellers thought it was a good time to  sell, while 28% of buyers thought it was a good time to buy. In 2020 however, 44% of buyers had more than a 20% down payment, and obviously many of them have the ability to bid some much higher prices to beat out the competition.  This leads to another issue:  appraisals.  Not all overbid prices are appraising, leading buyers to come up with more money, and how some are doing this is detailed in this article about the appraisal gap.

Who's not buying so much? Rental property investors, as COVID issues came to the frontline.

What will make the situation easier in the future?  Rising interest rates, more housing inventory, and an ongoing improving economy.
 

*as reported in CRMLS 

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

How Do I Find the Right Property?

Today buyers have the ability to constantly look at homes on the internet before ever finding an agent to work with, or really knowing what they want.  In fact, according to surveys of buyers, the vast majority start their home searches online.  There's so much to choose from, so what should buyers do if they are really serious shoppers and know they want to buy? Put in writing what you are looking for.  Write down everything that you think is significant for making a house (or condo) your home.  Maybe your first decision will be:  am I looking for a single family home, or a condominium?  How many bedrooms and baths? Sometimes people say, "I'll know it when I see it", but that approach in my experience has never led a buyer into a home. Buyers should be as clear as possible about their priorities, but also expect a little flexibility about them.

2.  Most people have a location in mind--schools, shopping, ambience, are all things to consider. More than one area should be considered in order to give more options.

3. If you go to see homes at open houses or private showings with your Realtor, have an idea of what to ask questions about in  terms of condition, upgrades, age, etc.  Some things will not be visually obvious or known to the listing agent or your Realtor, they will more likely be a question for the physical inspector if you are in escrow on the property.

4. It's wise to not expect that a property have exactly all the features you would desire--just keep in mind that you can "make it your own" in the future.

5.  Working with an experienced Realtor will help you gain the right knowledge in your home search--online searches will be a good preliminary tool, but an experienced professional will guide you to the local market and buying preparation.

While the experienced past buyer may think some of these things are obvious, the market changes and so do certain aspects of purchasing.  An experienced professional has current knowledge of transaction requirements, as well as the current housing market!

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

A Sign of the Times--California Property Pictogram and Showing Rules

a

How to Visit the Property

Are you wondering about what it takes to see property now, if you're a buyer, or marketing your property if you're a seller?

On May 8, the California Department of the Public Health issued its “Industry Guidance: Real Estate Transactions,” which requires agents to post rules on the property – with pictograms -- that must be agreed to as a condition of entry by all people viewing the property. 

• Wear a protective mask
• Wash your hands with soap and water, or hand sanitizer
• Wear gloves
• Practice social distance, 6 feet apart
• Do not touch surfaces, including knobs, faucets, countertops, light switches, etc.
• Discard disposable gloves, asks, or shoe coverings
  

This or a similar rules form must be posted at the entrance to the property being shown, as well as a form signed by showing agent and the buyer, will keep property showings in compliance with the current health standards. 

It's part of the "new normal" in the industry.  Visitors to the property are required to bring mask, gloves, and engage in social distancing per these rules.  Sellers will need to keep some hand sanitizer handy.  It's really not too much work, and actually keeps things clean!

If you'd like to know more about preparing your property for the current market, or know your home's value, I'm very easy to reach!

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Owning vs. Renting - What Is the Comparison?

House, Owning vs Renting, April 2020
Click to enlarge

It's worth a look to find out what the difference is between renting and owning.
Let's say you're currently paying $2500/month in rent and you're thinking how nice it would be to own instead.  Based on a single family home price of $500,000 (it could be less if you're looking at condos, but remember to include HOA fees), and a down payment of 10% ($50,000), you could come out ahead in the local market after 4 years.  This is assuming a loan at around 3.63%, hazard insurance, home maintenance at .5% ($2500 annually), annual home appreciation of 2.5%, annual rent appreciation of 2.5%, and a gross household income of between $77,000-$165,000 where your tax savings might be about 22%.

Condo, Owning vs Renting, April 2020

The second graphic is for a condo at $400,000, monthly HOA dues of $275, gross household income up to $77,000, and a loan down payment of 5% ($20,000) and home maintenance cost of about .1% annually (that depends on numerous factors not included here).  A condo purchase like this one has an earlier date for breaking even, but notice the differences in equity.


These are samples of course, but based on standard Los Angeles County property tax rate of 1.25% (increases over time), and an HOA dues level which could be higher or lower depending on luxury vs basic HOA, and other factors. It's not guaranteed that the home growth rate will continue at it's present rate.  It's intended to be an example so that a prospective buyer might think about his/her capability to buy.

Many people prefer to rent, but many people have incomes and savings which could allow them to buy and obtain home equity benefits and tax savings.

If you have a sample scenario you want to try, just contact me!

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

What Is Happening With Buying, Selling and Closing in California??

UPDATE: real estate is now classified as an essential business. Stay tuned for further information about what this means for you.

If the pandemic was happening before the widespread use of the internet, a lot  of our current options would not be available.  So much of our business can be handled without being physically present, that we can get all transaction documents signed, all escrow documents signed, without having to leave our computers.  Listings may be uploaded, viewed and closed virtually.

One could theoretically forego all physical contact and buy the property, and in fact, some buyers have bought this way.  What is changed, however, is, if strictly following California Association of Realtor guidance, is currently there is no in-person showing of properties, no in-person listing appointments, no property inspections, no in-person open houses--but there are virtual open houses.  Well, what if it's a vacant property, and there's no one to be in immediate contact with?  Maybe then?  Best get legal consultation, but be assured, if your property has to go on "hold" status for a while in the MLS because buyers don't want to come over and see it, and right now many do not, and you're not getting any offers (digitally of course), the MLS will not count those days on "hold" status, so when it does go back to "active", that time on hold will not be included.

So, right now, Realtors in California do have to comply with the "Safer at Home" California prohibitions.  California Association of Realtors is currently, however, attempting to get the Governor to make real estate one of the essential businesses.  Because after all, some people are already in escrow, and have to move out and away for the new owners.

But if you are thinking of selling, and have more questions about how to handle a "virtual" situation, I can definitely help.  Yes, the County Recorder Office is closed, however, the title company I most prefer to work with is issuing gap title coverage so that a property can still close, and be covered.  Escrow companies are not receiving in-person visits, but their officers are still in the office working, handling phone calls, and issuing documents.  Are you not computer savvy?  You can still get your docs sent to you for execution and physically sending back, but if you can handle digital signatures (not difficult at all) then all real estate transaction documents on the Realtor's end, and all escrow documents can be handled via computer.  This has been the trend for several years now, in fact.

It's a good time to buy, in Long Beach there's 1.6 months of inventory, that means the available properties to buy are low and you could have competition, but on the other hand interest rates are extremely low!!!! so you save money on the monthly payment. And, it's a good time to sell, because there only 1.6 months of inventory in Long Beach.

So contact me to find out your options right now--the crunch won't last forever.



Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Some New 2020 Laws in California That May Affect You

2020 New Laws in California

Over 800 new laws were passed into law effective January 1, 2020!

AB5 - Affects independent contractor status of many occupations.  Certain workers were exempted, or "carved out."  Realtors were one such group exempted and still maintain their independant contractor status.  Truckers, as you may know, were not, but are fighting that status in the courts. Realtors are one of the exempt classifications.

AB 1482 - Certain notices to ALL tenants should be sent out already, and new CAR forms contain the appropriate notices.  There are ambiguities in this statute, ie., "region" vs "area" for calculating CPI, which will require time to work out. However, all landlords should be providing, as of January 1, 2020,  an advisory about the tenant rent cap and just cause provisions.  If the landlord is exempt, for example, because the rental property is a single family home or a condo, the exemption does not apply if the tenant has not received the advisory.  As a Realtor, I may give an advisory form to my client for their tenant, but otherwise landlords should contact their property manager or find the appropriate advisory on the internet. This information should be given immediately to tenants. Some cities have additional rent cap laws which may be more restrictive, however, Long Beach recently completely rescinded its law and is now following state law. Property managers, owners and interested parties are advised to independently research this law, one of the most restrictive in the nation, through their own counsel.


AB 1110 - Rent noticing where AB 1482 does not apply to a property and there is a month-to-month tenancy.   A 90-day notice is required if landlord increases rent by more than 10% of current annual rent.

AB 68,670, 881 - Accessory dwelling units.  Limits on what cities can impose.  HOAs must allow construction of ADUs, cities cannot prohibit laws against ADUs (but there are requirements to follow for construction). ADUs in HOAs would not reasonably be considered for apartment style multi-family structures, which typically have a common parking garage and balconies. It would have to be an HOA with single family lot with a garage, for example; the owner is also advised to check governing documents in their HOA.  If you have a question about ADU requirements in the area you live in, I advise checking your local city's website for all their posted information.  If you still have questions, or believe you are being given wrong information in regards to the state law, contact me for further help.

SB 329 - No discrimination allowed based on source of income, i.e., child support, Section 8 housing income, or other public assistance, for example.So if between two applicants the Section 8 applicant has, for example, a better credit score, than another, a landlord may not discriminate against the Section 8 applicant simply because of Section 8.

SB 969 - Garage Door battery backups - effective 7/1/2019 - If a new automatic door is installed, or an existing opener is replaced, a battery backup installation is required in event of power outage.

California Consumer Privacy Act - Privacy Act Advisory provided through CAR forms.  Relative to real estate transactions, a party may come into contact with a "big company" as defined in the Civil Code may be collecting information about which the consumer may have the right to opt out, but with certain results. Such companies may include the MLS, which uses photographs and sales information about your property. An advisory form is now in effect describing to the consumer their right to be notified which is given to clients of Realtors.  Others wishing to obtain similar consumer information may contact me for the Legal Q&A on this topic.

Employment laws:
SB 530 - Workplace sexual harrassment training required. New harrassment laws also include abusive conduct, not just sexual harrassment.  This is, in fact, because agents work broadly in the field which is their entire workplace, so would also include client behavior towards an agent or broker.  This is meant to address repeated insults, or hostile and offensive behavior.

AB2770 - Protection for reporting victims of sexual harrassment.

AB 51 - Employer no longer can require waiver of rights to arbitration by employees.

SB 1412 - Criminal background checks limit sealed or expunged material.






Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

It Just Got Easier to Buy and Sell Condos with FHA

Downtown Long Beach condo view

As I've previously posted,  condos haven't gotten a break from HUD for a long time.  Many HOAs, if not most, in Long Beach lost their FHA certification and didn't renew it.  It was once a permanent approval, but due to the 2009 and later mortgage fallouts, HUD required HOAs to renew their FHA loan approvals every two years.  For most Boards, that's a nano-second.  Plus, HUD removed the ability to get a "spot" approval, meaning a single unit could be approved for an FHA purchase, even if the rest of the HOA was not approved.

Finally, HUD is giving back.  Effective October 15, 2019, the new rules (click on the title link) will:

Extend the approval period from two to three years;
Allow for "spot" approvals, those single unit mortgage approvals, up to 20% (currently, none are allowed);
Allow additional flexibility in the ratio of investors to owner-occupants in the association, between 25-75% (currently, 50% owner occupancy required).

To give an idea of how this will help FHA buyers, nationally there are more than 8.7 million condo units, but only 17,792 FHA condo loans were originated in the last year, according to the National Association of Realtors.

These loans changes may also come under specific lenders' requirements, so who you work with on youir FHA loan may have an impact on what HOA may or may not be eligible.  However, since lenders want to make loans, there should be a lot of incentive to help a qualified buyer complete a condo purchase.
These new changes are very beneficial to condo sellers, who should find a buyer faster when not owning in an HOA-approved building.

If you are interested in finding out about a condo purchase, Please contact me.  I've been helping buyers and sellers since 1994!


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Here Are Important Tips For Your Online Home Search

Hunting for a new home online is a great place to start your search, but it should not be your end all be all. Good listing agents are excellent at highlighting the best features of the home, but keep in mind there may be more than meets the eye. To make the most of your time and efforts and gather a well-rounded picture of home listings online, keep the following three things in mind.

1. Stay up to date. When you start your search, make sure you find a site that pulls up-to-date listings directly from the multiple listing service (MLS) where real estate agents actively post their most current homes for sale. Many online resources update less often or fail to remove listings that are off the market, making it more difficult to sort through the clutter.
2. Pictures can be deceiving. Real estate photographers are experts at showing a home in the best possible light. Many use tools and strategies to boost appeal, such as a fisheye lens to make areas look larger and creative editing to make colors and textures really pop. But, often listings will not contain photos of unappealing parts of the home, like small closets or outdated bathrooms.
3. See it to believe it. Once you find what appears to be your dream home online, call up your REALTOR and schedule a showing. You want to take the opportunity to vet the home in person and explore every part of it before beginning the offer process. Your REALTOR will help you cover all your bases and will ask questions you may not have thought of.

---

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

What Does It Mean to Be a Co-signer on a Mortgage?

In today's world where there are higher home prices, many first time buyers, or younger buyers especially, are fortunate to have parents or grandparents to help them out financially.  There may be different reasons for seeking a co-signor on a mortgage loan, and sometimes there is another adult willing to help in that way.

According to an article by Lise Howe in REALTOR Magazine, 22.8 percent home purchase loans in 2017 included a co-signer, an increase from 2016 (data from ATTOM Data Solutions).

Frequently, buyers and sellers look to their Realtor as a source for answers during a transaction, but there are times we cannot advise when the question involves legal advice, tax advice, and other issues which are not included in a real estate license.  So a buyer and his/her co-signer really need to obtain advice and information about the responsibilities of being a co-signer.

So keep in mind, if you're a co-signer:

1. You are completely responsible for the loan payments if the buyer is unable to make payments.
2. The co-signer's credit report will reflect problems, if any, with the mortgage.
3. The loan affects the co-signer's own debt-to-income ratio, which could affect their own purchase plans in the future for borrowing capacity.
4. The co-signer's debts and financial information must be given to the lender as part of the buyer's loan process.
5.  Is your risk in the situation covered, i.e., your cash flow?

The decision for what type of mortgage to obtain is the buyer's responsibility, and it's the buyer's responsibility to search out their best options for borrowing.  So buyers, please talk to your tax advisors and a financial planner to make sure whatever you're considering fits into your financial capacity.

An option that does not involve co-signing is for the buyer to obtain help on the down payment only; with interest rates having dropped lately, buyers can qualify for more and possibly not need a co-signer. 

Please contact me if you would like more information about making a home purchase.  I have worked with many first time buyers in my 24-plus years of real estate experience!


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

A Few Positive Points about the Current California Housing Market

Here's some good news about the California real estate picture, in spite of everything else we hear/read/see:

• California unemployment is the lowest in over 40 years.
• The number of active listings increased in all California regions--highest number is in Southern California as of February, 2019:  over 26,000 single family homes on the market which is 20% more than last year.
•  California home price continues to grow at a modest pace, median price Feb. 2019 was $534,140, growth of 2.2%.
• The Inland Empire (i.e., San Bernardino County, and surrounding areas) price growth increased to 5.7% , compared to 1.4% in Los Angeles area. So what does this say about where it could be a good place to buy?
• Over all increase in owner-occupied single family homes from 2000: from 6,295,466 to 6,669,522 in 2018.
• More than half of California sellers surveyed by CAR think it's a good time to sell in 5 of last 7 months.
• Interest rates are low and may stay low for the rest of 2019! Good time for FHA buyers! The lower the rate, the lower minimum qualifying income for the buyer! Take advantage of low rates!
• Despite tough market conditions, first time buyer share is highest since 2012, at 34.8% in 2018.

Overall, the economy fundamentals are strong, including low national unemployment rates and increased job growt as of December, 2018.

While housing affordability is still an issue in California, prospective buyers do have options. And, a very important fact for buyers to learn is that there are LOW DOWN PAYMENT options, in the CAR survey over 70% did not know that an FHA loan only requires 3.5% down!!  FHA loans also allow for less perfect credit than conventional mortgages.
Please contact me if you are interested in buying or selling and let me put my 24+ years of experience to work for you!


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

More Realistic Lender Rules for HOAs would permit more Buyers to Buy Affordable Homes

According to the National Association of Realtors, there are between 145,000 and 155,000 condominium projects in the United States.  As background information, in order for FHA loans to be approved in a condo development, the entire association must be approved by HUD (per its guidelines) and this approval must be obtained every 2 years. That is a lot of paperwork for most HOAs to focus on, along with all their other usual work in maintaining their association, via their Boards of Directors.   "As of January 2019, FHA has approved only 9,427 of 52,410 condominium project applications." Hence, many association in the U.S.--certainly in Long Beach--have dropped their former approvals, and sellers must now depend on buyers who obtain conventional financing.  But they are losing prospective buyers, since many first-time buyers opt for FHA loans for a variety of reasons.

HUD has been asked to lengthen the recertification process time, as well as loosen up on other items such as owner-occupancy requirements.   Currently, 50% owner occupancy is required for FHA loans, but HUD is being asked to reduce that to 35%--because many HOAs do not have rules about how many rentals are allowed, and lower owner occupancy ratios are excluding buyers bringing FHA loans with them. Also, HUD restricts the number of FHA loans allowed in a project to a very low percentage, but eliminating that rule would allow more buyers to buy. In the past, "spot approvals" were allowed, meaning one unit could be approved for an FHA loan in a non-approved building, as long as that HOA met certain criteria.  Spot approvals are once again being requested, again, this would increase homeownership.  The two-year approval period is asked to be increased to five years, this would vastly help Boards of Directors and sellers alike.

Given the almost daily appearance of lack of affordability for buyers in the newsfeed, an opportunity to buy a condominium, which is a lower sales price market compared to houses in many areas, is an opportunity for homeownership for all.

If you are interested in a condominium purchase, or finding out about the features of condo owership, please contact me via phone or email. I am familiar with condos, and would be happy to share my information with you.


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Average Selling Prices in Long Beach, Cerritos, Lakewood, and Local Counties, August 2018

Currently on Long Beach market for $474,999

All these prices are for the month of August, 2018, based on data from CRMLS Infosparks:

Average prices for single family homes in Orange County are $1,098,542, while Los Angeles County as a whole is now at $997,845, and San Bernardino County's average is at $371,677.

Average single family home prices vary according to area, and here's what they look like locally:

August, 2018

Long Beach
$759,955 | +10.7%

Lakewood
$609,570 | +5.2%

Cerritos
$825,082 | +6.6%

Los Angeles County
$977,845 | +7.7%

San Bernardino County
$381,677 | +6.7%

Orange County
$1,098,542 | +7.6%

These statistics show a mix of pricing, with Long Beach at an average days on market at 18 days, Lakewood at 18 days on market, and Cerritos at 22 days on the market on average.  Inventory time on market has increased in the three cities compared to April, up to 3 months (standard is 6 months), and closing prices still continue within 1.5% over or under the original price.  In other words, since the last analysis in April 2018, houses are still selling within 2% of original list price, with a lower time on the market, and a slightly higher  housing inventory from which to choose.   

Condos

Briefly, Long Beach condo average price is $437,911, about the same as in March, 2018. The condo average for Los Angeles County is $602,193, a slight decrease from last month. Other local city condo prices: Cerritos: $414,000 (increase from April);  Monterey Park, $559,875; Pasadena, $632,182 (decrease from April); Whittier, $352,089 (small decrease from April).

 It’s a somewhat looser market right now!

For an online and automated home valuation, try my site at http://www.juliahuntsman.com/home-evaluation.  It probably works more accurately for single family homes than condos in some areas, depending on what properties lie within about a one-mile radius.  Try it!  And I am always happy to do a more customized report to send out via e-mail.  If you're thinking about making a move, do it! It pays to keep an eye on things.

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Long Beach Housing Inventory

 We're hearing more talk about market slowing, a little early for this time of year.

There's still far less than the traditional months of inventory on the market, i.e., 6 months meaning how long it would take to sell what's currently for sale.  In Long Beach, it's almost the same for both single family homes and for condos:  2.4-2.7 months of inventory. 

And yet, the number of sales compared to June of last year is down about 28%, while the average sales price for houses and condos are UP!  This is also true on the state level, according to California Association of Realtors: "June marked the fifth consecutive month that prices increased by more than 8 percent annually, indicating that price appreciation remains robust and is not showing any signs of leveling off."  But Orange County experienced one of the biggest declines in number of sales, all counties experienced a decline however, possibly due to buyer fatigue at rising prices.

Many younger buyers are able to get some financial help from families who may aid with down payments, which is a great help for them. One surprising fact is that single women over 55 are a growing segment of buyers, citing rising rent costs as a reason, not for the purpose of purchasing multigenerational housing.

Interest rates are remaining the same for right now, but a possible increase is hinted at in September. The mortgage lenders and banks, however, usually anticipate an increase in advance and build it into their scenarios in advance, but other global market effects come into play also, and there can even be a decrease in rates!

Currently, the average days on market for all 228 Long Beach single family homes currently in escrow is 45 days. It's a very good time to sell and find a new home.

For more information about selling, please contact me!


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996, representing buyers and sellers since 1994.

How Much Property Information Does An Agent Have?

It's not unusual for members of the public, including a Realtor's client, to think that the listing agent probably knows all there is to know about a property. There are indeed certain obligations an agent has, especially with the sale or lease of residential property such as houses, condominiums, or any property that legally is considered to fall within a 1-4 unit configuration. 

Realtors are required to do a visual inspection of the property, which means walking around and noting conditions that are visually accessible, and this requirement also includes disclosure of defects known to the broker but unobservable to the buyer.  The California Civil Code also says  that the required inspection "does not include or involve an inspection of areas that are reasonably and normally inaccessible . . .".  An agent therefore is not required to go under the house, or into the attic space, or know the condition of walls within a locked closet if there seller has not given access. This also includes personally researching the property, although the agent should be able to point the client to outside resources for a buyer's due diligence during escrow, for example. An agent's duty of inspection also does not include the common area or other units of a homeowner association when the buyer is being provided all relevant HOA information required by the contract with the seller. So the Realtor may have no knowledge about the pool or spa and is not required to go inspect it, but if the agent has done previous transactions in the HOA, then perhaps that agent has some knowledge learned from prior transactions, and should disclose that information.

Both the buyer agent and listing agent are required to do a visual inspection and give a copy of their report, referred to as an AVID (Agent Visual Inspection Disclosure) to both the buyer and seller.  Neither agent is required to interpret the reason or source of a dark stain on the wall, for instance, but only to make a note of its existence in order to advise all parties.  It is up to the buyer to inquire further of the seller or hire a professional to get further opinion on such an issue.  Nothing in the law "relieves a buyer of . . . the duty to exercise reasonable care to protect himself or herself, including those facts which are known to or are within the diligent attention and observation of the buyer...".  So the buyer has the obligation to inspect the property, and all the conditions as spelled out in the contract, to his/her own satisfaction.

If an agent does learn "material facts" about a property, whether or not by visual inspection, ie., or if listing agent makes a disclosure to the buyer's agent, or other information was disclosed in the multiple listing service about lack of permits, then the agent is certainly required to disclose that information to the client.   So sellers, when the listing agent starts walking around your property to take a look, this is because they need to do this to help you get your property sold.

Back to the beginning paragraph -- I have heard some members of the public say that they chose to use the listing agent to represent them as a buyer because the listing agent must know more about the property.  But nothing could be further from the truth, because the listing agent probably hasn't crawled under the house either, and whatever significant information the listing agent does have, is required to be shared with the buyer.  

Help for Buyers Who Want a Condo

California Association of REALTORs Housing Affordability Fund’s Homeowners Association Grant Program will provide qualified first time California homebuyers up to six months of HOA dues, not to exceed $2,500.  C.A.R.’s Housing Affordability Fund has allocated one million dollars towards this program.

How to  qualify?
• Homebuyers must use a California REALTOR® in the transaction (REALTORS® must apply on behalf of their client)
• Purchase a primary single family residence* in California with the intent to occupy the property as your primary residence for 2 years
• Be a first-time homebuyer*
• Buy a home with applicable HOA dues/fees
• You must have used financing to purchase the single-family dwelling
• The purchase price of the Single-Family Dwelling* must not exceed 150% of the mortgage limit set by the FHA for one-family units in the county in which the Single-Family Dwelling* is located

Please note: HAF must receive all program requirements no later than thirty (30) days after closing escrow.
Want to know more? Please contact me by phone or email

Where Is The Lowest Homeownership Rate in the Nation?

According to the U.S. Census Bureau, the lowest homeownership rate in the nation is right here in Southern California:  Los Angeles and Orange Counties.  In the second quarter of 2016, this region had 46.5% of residents living in a home they owned.  That's down from 49% and 48% from prior quarters.

According to First Tuesday Journal, the peak rate of 60.7% was reached in 2006, and the current 46.5% is well below California's historical average of about 55% homeownership rate--although bear in mind the low point was at 43.4% in 1940.  Today's California home prices have exceeded average incomes, and even though mortgage rates are still historically low at today's 4%, future rise in mortgage rates will help that rate continue to languish.

Mortgage rates which have operated in cyclical fashion according to the Fed's decisions about the national economy, plus the lingering effects of past bankruptcies and foreclosures on displaced homeowners, and the return of California's employment levels all have an effect on housing in this state.  An ongoing debate remains about whether young adults of the "millennial" generation are motivated to become homeowners, or not.  

One misperception among many hopeful buyers is that a 20% down payment must be obtained in order to buy -- that's false -- along with a lack of knowledge about financing options in general; another issue for many younger adults is the lack of savings combined with a higher rate of personal spending which prevents some from saving enough for a low-down-payment loan, such as a 3.5% FHA loan, and necessary closing costs.  Keeping credit scores in good shape, and understanding debt effects (i.e., keep debt on credit cards low, low, low), may do a lot to help offset impacts from necessary debt. 

For more information on facts of buying, please contact me!