Long Beach Residential Unit Market

Did you know ...?

There continues to be a demand for Long Beach residential rental housing, and rents are at a premium.

The average sold price for a 4 unit property in 2021 was $1,321,209, which is up from an average price of $1,165,367 in 2020.*

Belmont Shore units

The average sold price for a 2-3 unit property in 2021 was $987,857, up from an average price of $883,062 in 2020.*

Currently, the average list price in Long Beach for 2-3 unit properties is $1,094,045, and for 4 unit properties the average list price is  $1,336,468.  Actual rents for  a 2 bedroom/1
bath may average about $2150/month, with proforma rents being a little higher depending on the size and area location, i.e., downtown, North Long Beach, Belmont Shore.* 

The last 90 days of average sale price of a 2-3 unit property, citywide, is $1,153,356 -- 24 of 59 properties sold over list price.  The average sale price for a 4-unit property is $1,375,283 -- 4 of 18 properties in the same time period sold over list price. 

 

Unit sold prices in Long Beach

To see active listings for duplexes, triplexes and 4-unit properties in Long Beach, please go to this search  which may be revised to include other types of properties, and other cities.

For an online (or in person) valuation of your income property, just contact me.

 *Information from CRMLS.                    

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

Who Wants to Buy a House? Millennials Do Too.

If you watched 60 Minutes on March 20th, you probably saw the segment with Lesley Stahl about the rental market, specifically the corporate rental market.  While Gary Berman of Tricon, whom she interviewed, stated that the corporate landlord represented only about 2% of the total national rental market, it is a powerful segment.  Because their homes are turnkey in a rising market, their rents may be up 30% or more compared to a previous year: examples were 35% higher rents in New York, 39% higher in Portland, 10% higher in Los Angeles, but surprisingly down in Kansas City.  There has always been part of the population which by choice prefers to rent--such renters actively do not want the responsibility of maintaining property.  And then there is the segment of the population which may have good income, but is cash poor, or has credit ratings below the mortgage approval guidelines.  But increasingly are those young renters who would like to buy their first home, have excellent qualifications to get a mortgage but may not have enough cash to compete in over-list-price multiple bid offers or enough to obtain a 20% down loan, perhaps 5% down is the best they can do.  

 View from porch of home

But one thing that I don't believe is true are the younger buyers--typically in the under-40 millennial age group--who have been characterized in multiple media sources in the last few years as being uninterested in owning a home.  This was made clear by the young couple spotlighted in the 60 Minutes show, who directly contradicted the statement made by Mr. Berman that millennials "don't desire to own a home" because their main emphasis is living in a turnkey space and thus fit the profile of "You can rent the American dream" as opposed to owning it, which young couple made it clear they wanted to be able to buy a home, but competing in the current buyer/seller market was extremely tough for them.

In my experience, adults of all ages would prefer to live in a turnkey home, not just younger adults: and if not turnkey then a home purchase that presents a clean, relatively updated condition.   The view that younger adults don't care about owning a home is a misrepresentation that can ultimately deny them the opportunity to own, thereby gaining housing and community equity.

The current trend in asking buyers to remove standard contract contingencies can be a direct pathway to housing disaster for  a number of reasons--yet this is what many younger (and older) adults encounter in the home offer process, and is indeed discouraging, and just influences their continuing status of being a renter when they would like to be an owner.  The upward price climb is staying in motion, but other things do not have to, and should not.  Sellers should be advised of the risks involved.

See the 60 Minutes video .  

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

What Are You Willing to Give Up to Buy Your First Home?

A survey of just over 1,000 Americans, conducted by Cinch Home Services, a home warranty firm, shows

what some people are willing to do in order to afford a home purchase.  Homes are expensive, more than ever especially in California where the median price is now over $800,000, yet owning a home is still viewed as most important, especially in the younger generation. And what are they most willing to give up?  Alcohol.  

In viewing the survey results, it becomes obvious that saving money could impact various industries:  California wine industry, the travel industry, clothing companies, restaurants, candy manufacturers of chocolate--it goes on and on.  Not only is this survey about home buying, it could also be seen as an indirect comment of how housing affects the overall economy, as well as being an overall picture of how many young adults spend their income.  Is alcohol such a big give up? It can be if going out to dinner with drinks is a  consistently main feature of leisure entertainment.  And some other choices don't really seem tied with saving money--but saving 30% of your salary might really add up for a prospective buyer if that dollar savings is significant enough for their chosen market price. Maybe not seeing your family as often means you're spending more time working overtime--that too might help economically as long as it doesn't infringe on family ties too much.  But getting only 3 hours of sleep every night is not going to lead to a more productive workday for the average human being who needs 7-8 hours of sleep. So some of these choices are not productive, in my view.  But some are, and young adults should review their monthly budgets to see where they can save money and cut back on debt (not specifically mentioned here).  Cutting back on debt improves credit scores, which greatly assists in getting a mortgage loan, and also produces a greater sense of well being, which is important in working towards the goal of homeownership!!

For more information on home buying or selling, please contact me.  I've had 25 years of experience helping buyers and sellers with their residential properties.

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

Rent Growth is Surging

Rents increase in 93% of metro areas

The national multifamily is surging ahead this year in many markets, over 10% to $1539 monthly rent nationwide.  August, according to Yardi Matrix's August report, showed year over year rent growth in 30 markets:  Phoenix leading at 22 percent, Tampa, Las Vegas, San Francisco at 1.4%.  

In August, seven gateway markets surpassed pre-pandamic levels, from March 2020:   Miami (16.2 percent), Boston (7.0 percent), Chicago (6.4 percent), Los Angeles (4.9 percent) and Washington, D.C. (3.9 percent).  The ApartmentList.com graphic, from an April presentation, shows increases in metro areas.

On a month-over-month basis from July 2021, Las Vegas, at 3.3 percent, with the Inland Empire and Seattle, at 3.1 percent, registered the largest increases.

Single family rentals, however, outpaces multifamily in the top 30 metro areas, especially in Florida and Texas metro areas. 

Long Beach

Locally, what are rents for residential properties?  For brand new housing, Holland Partners has recently opened Volta at 635 Pine where rents start at $2175 for a 1st floor studio under 500 sq. ft., on up to $4590 for a townhome style unit--there are 11 units in this project designated for affordable housing.  

Long Beach is a mix of neighborhoods and property styles, so if the apartment searcher opts for a wider variety, the REALTOR MLS reflects a range of different properties on the market for rent or lease, starting at $1395/month for a 500 sq.ft. unit on Pine Ave (downtown) to $15,000 for a house on Naples Island.   Average rent for units in a 4-plex or other apartment style unit is $2100/month; average rent for condominiums is $3000/month; average for a single family is $3477/month (excluding the outlier house for $15,000).  

Alternately, rents in Huntington Beach start at $1800 for 593 sq. ft. condo; Lakewood currently has 4 listings for tent (in the MLS), starting at $3000; Cerritos starts at $2195.  While the renter may find more listings on other internet sites, these prices will probably be very indicative of what is listed elsewhere.

There are many economic factors relating to the higher rents, but one major factor stands out, that consumers who did not lose their jobs during the 2020 pandemic months are still economically strong, while other workers in the food industry and retail were more affected, unfortunately, and will take longer to gain strength in the housing market.  The numbers of individuals who have returned to family homes is a topic for another day, but is also part of the renter picture.

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

California: 2019 Just Cause Eviction and Rent Cap Bill AB 1482

Studying new rental laws?

As of this date, this California state bill has not yet been signed by the Governor, but is expected to be since he has indicated his approval.
Bill signed in October, 2019.
Update: Long Beach rent ordinance rescinded by Council on Dec. 3rd, 2019.

Exemptions for Previously Existing Ordinances

This AB 1482 recognizes local ordinances, such as Long Beach Tenant Relocation Assistance (see link at bottom), passed prior to September 1, 2019 as follows:
Even if a local ordinance is less protective than the AB 1482, it will preempt the newer state law unless "more protective provisions" are passed to that local ordinance after September 1, 2019. If Long Beach or other cities were to do that, specific terms must be met.  "More protective" means:

"1. The local law must be 'consistent' with AB 1482. 2. The local law must provide higher relocation assistance or provide additional protections. 3. The local government has made a binding finding that their local ordinance is 'more protective.' "

 So if you're a Long Beach landlord or renter, check the link to the local ordinance below for complete coverage of its terms which went into effect August 1, 2019. Please note that OYOs and stock coops may be subject to rent caps and just cause under the new AB 1482, as noted below. Note:  Just cause under AB 1482 applies to tenants who have been continuously and lawfully occupying the property for 12 months or more. 

Otherwise, if you're in another city without its own ordinance, or unincorporated areas, you will probably need to look at the link to AB 1482.

AB 1482:
Goes into effect January 1, 2020.

Rent cap:  All rental increases since March 15, 2019 will count toward the cap of 5% plus inflation, or up to 10% total, whichever is lower.  See indexes for determining inflation https://www.bls.gov/regions/subjects/consumer-price-indexes.htm#CA  or this index if regional information not available for you  https://www.dir.ca.gov/OPRL/CPI/EntireCCPI.PDF.

Exemptions from the rent cap: 
Single family residences and condominiums, provided renter receives notice of the exemption (this may not include stock coops or OYOs, however and they may be subject to rent caps and just cause);
The owner is not a real estate investment trust, a corporation, or an LLC in which one member is a corporation;
Housing built issued a certificate of occupancy in last 15 years, generally meaning newer housing;
A duplex in which one unit is owner's primary residence;
Housing restricted by deed as low, low income housing;
Dormitories for higher education institutions;
Housing already subject to local rental control ordinance;
Section 8 rentals are likely exempt;
Exemption for just cause for ADUs, and an SFR that rents out up to 2 bedrooms in the house, or in which a tenant shares bathroom or kitchen facilities with the owner; 

Reasons for just cause eviction include: non payment of rent; breach of lease after given notice to correct violation; nuisance; unlawful use of property; damage to property; refusal to allow entry; when a tenant fails to vacate after giving notice of leaving; subletting property in violation of lease.

One month's rent must be paid to a tenant in the following circumstances including: withdrawal from rental market; demolition or substantial remodeling of property; government order to vacate; conversation of property to owner occupied.  Relocation assistance is not contingent on the renter's income amount.

Finally:
This post is NOT an exhaustive summary of these laws, so it is advisable for additional assistance to be consulted whether you are a landlord or a tenant.    However, I would be happy to provide the entire legal summary, as currently provided by the California Association of Realtors legal team, in pdf format, if you provide me with your contact information. It covers many questions and answers in great detail concerning AB 1482. 

For reference:  CA Bill 1482 , Long Beach Tenant Relocation Assistance Bill.

Finally, complete property search of both sold and active listings are available on my website at www.juliahuntsman.com, simply by looking in the dropdown list under "status"-- the following is a link to income property throughout Los Angeles County actively listed in the MLS:  Income properties.
Rental/for lease properties may also be searched on the site in the same way.
Please feel free to  contact me for help on finding a property!!
.
Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Long Beach's Past: The “Cougar” Countess and Long Beach’s Blackstone ...

Long Beach's Past: The “Cougar” Countess and Long Beach’s Blackstone ...: 

Postcard Long Beach History Collection

Here is the fascinating history of the Blackstone in downtown Long Beach, written by my friend Claudine Burnett, formerly a librarian for the Long Beach Public Library system.  The Blackstone, located at 330. W. Ocean Blvd., was at one time a hotel and is now an apartment building which was granted landmark status.

Built by a woman who had inherited wealth from her first husband, she was one of the many people who came to Long Beach in earlier decades and left her mark on local architecture.

 Excerpt: 

"What did this new property Kate now owned look like inside? 

 "The Blackstone had 70 rooms on the second and third floors and 75 apartments on the other floors. Rooms and apartments were finished either in mahogany or ivory.  On the second floor there was a ballroom (dancing was held there every Saturday afternoon and evening), billiard and card rooms. Each of the 8 floors had a sun parlor. Furnishings included floor lamps and table shades and over-stuffed furniture.   In the basement there was a garage for 75 automobiles, shower and dressing rooms for the use of guests returning from the beach. It was quite a luxury to be able to step from one’s car, catch an elevator and go directly to one’s apartment or hotel room. Single apartments rented from $85 to $150 ($1200-$2,120) per month; double apartments $165-$225 ($2330-$3,180) per month; a room started at $2.00 ($28.30) a day.  It opened for business on July 1, 1922."

 

Long Beach's Past: The “Cougar” Countess and Long Beach’s Blackstone ...: Postcard Long Beach History Collection

Law Enforcement Cracking Down on Online Home Rental Scams

Don't get fooled by a fraudulent "rental"

The rental housing landscape has been the target of fraudsters.

For instance, a legitimate "for sale" listing which shows up not only on the local REALTOR multiple listing service (MLS), and then (according to licenses) automatically fanned out to such sites as Realtor.com, Trulia, Zillow, etc., and also possibly manually entered by the listing agent into other sites such as Craig's List, is hijacked.

Actual listing agent information is deleted by person(s) attempting to misrepresent the listing, but the rest of the listing information, including photos, is resubmitted as a rental property with a new rental price, often one which does not support local neighborhood values, but gets the fraudster plenty of emails or phone calls.  The purpose of this is to get an unsuspecting renter to wire money to the "agent", before agreeing to see the property.  Of course, after they obtain money, there is no showing of the property--the fraudster may live on the other side of the country, or in another country.  This has personally happened to me, and to other area agents as well.  To get the false information and listing deleted online takes time and phone calls, including phone calls from renters who went to my listing to verify its existence, and then called me from the "for sale" sign.  Of course, it's not for rent, it's for sale.  Moral of the story:  Do not send money or personal information to see a rental.

Another local scenario in the 562 area code is where another rental company with a different area code goes to vacant properties and puts up their own rental sign so that they will get phone calls off someone else's property for which they have no contract to lease or to sell.  Yes, they've been reported so they quit for a while, but after a while, the signs pop up again. 

This is a nationwide problem.  If you are a landlord, you should also take notice of this issue.
Always try to first verify the actual agent or owner of a listing, because this is happening just often enough to cause headaches for all concerned.

Below is an online article for the Freddie Mac Blog published today about this very issue, worthwhile reading for everyone on how to recognize and protect yourself from these schemes. 
Law Enforcement Cracking Down on Online Home Rental Scams: Law enforcement started the year by cracking down on fraudsters using phony online real estate ads to fleece would-be renters.

Rental Scams: Don't Fall For Them

One of the downsides of all the home listings on the internet is the abuse of them by hijackers.  They

go to sites such as Zillow and Trulia, choose a property and turn a legitimate listing into a so-called rental ad, with the listing agent not finding out until he/she receives a bunch of phone calls about a "rental".  In a very expensive and limited rental market, a renter is doubly frustrated when finding out that the seemingly good deal is too good to be true.  So not only is it a waste of time for those searching for a rental property, it's also an extreme annoyance to the listing agent whose listing is illegally used as a dupe and all the misdirected phone calls, as well as the time it takes to correct the situation on the listing site. 

The smarter people knew before they called me that $1200 per month rent for a 2800 sq. ft two-story house in a nice neighborhood of $500,000-$600,000 selling prices was suspicious, but they called me anyway after they drove by the property.  Some actually called the name given on the fake rental ad, which of course used my listing photos and information as if it were their own, and were told to send money before they would be given any more information.  This is the tipoff--a legitimate landlord or management company does not request money, i.e., security deposit or rent, up front for information. 

And another scenario may be that the rental does not exist at all.  Yet another is a rental sign in front of an actual advertised property that is for rent, or it may be a bank-owned property for sale.  In this situation the false advertiser is attempting to get business by re-directing prospective renters to actual rentals--one company has been complained about in California, yet they popped up again with their red and white rental signs on wooden stakes posted on properties that are not their rentals. 

For more information, contact the Federal Trade Commission.  Avoid sending money to people you don't know.

Renting vs. Buying a Home in California Today

Each region has it's own market, and here are some interesting comparisons around California for buying vs. renting.

A prospective homebuyer needs to think about total costs and expenses of owning a home--these include the principal and interest on the monthly mortgage payment, home insurance, property taxes, home improvements and repairs. Don't forget--tax deductions on mortgage interest and property taxes are among the savings that you will benefit from, plus other tax deductions as allowed in the owner's particular situation. Renters are basically concerned with costs of monthly rent and renter's insurance.

Is owning for everyone? Perhaps not, depending on the individual's desire to maintain a property, long term financial abilities, and short term or long term job relocation factors, and the fact that in some areas, renting may be a lower monthly expense.  But when the long-term view is taken, owning a home offers long-term security and financial return over time.  Whether you rent or own, you're paying for the home, but when you rent, you're buying it for your landlord--is that really what you want?

Today's interest rates are still low, around 3.75% for a conventional loan under $417,000 and even lower  for FHA loans.  In today's buyer's market, we're hearing lots of complaints about buyer competition especially in lower price ranges.  While each local market varies, so far this year, housing inventory is up compared to 2011 and 2012, so buyers need to "hang in there" and not give up, because this is still one of the best cycles in which to become a homeowner!

Do you want a more detailed explanation of your rent vs. buy scenario? Please contact me for a buyer's estimate sheet, and for additional market report information, go to my Market Trends page.

Best Time Ever to Save on a Mortgage Payment in Southern California

30-year mortgage rates since Sept. 2007

Dear Buyers:

Did you know rates are about 3.49% right now? Best time ever to save on a new mortgage payment in the Long Beach, California area!

Rates have trended downward since 2008, and that means you will pay less on your monthly mortgage payment for the same selling price. 

See what your monthly median payment will be at different interest rates and different selling prices.

The lower chart was made up when interest rates were a little higher, but get out your calculator to easily compute a selling price at a lower rate as follows:

Comparisons at higher rates/higher prices

For a home priced at $400,000, with a 20 percent downpayment and a 4 percent mortgage rate, the monthly PITI (principal, interest, insurance and taxes) will be $1,990 for the homebuyer. The monthly PITI jumps to $2,180 at 5 percent and to $2,380 at 6 percent. For each one percentage point increase in the mortgage rate, the payment goes up by almost $200 under these assumptions. Even for a lower priced home at $200,000, the difference in the monthly payment is significant as each percentage point rise in the mortgage rate tacks on $100 to the monthly PITI.  So, for a $400,000 home at today's 3.49 percent mortgage rate, the monthly PITI would be about $1885, and a savings of over $100 at a 4 percent rate.

Pulsenomics, in its latest quarterly survey shows housing prices for the future.
Price appreciation/depreciation expected over the next five years:
2012: -.4%
2013: +1.3%
2014: +2.6%
2015: +3.2%
2016: +3.5%

The average pre-bubble (1987-1999) annual appreciation was 3.6%.
(Thanks to KCM Blog for Pulsenomics data.)

When Is "Diving" into Lease Option a Good Idea in Southern California?

Sometimes I'm asked about the possibility of a lease-option as a way to buy a single family home.

Lease-options were used extensively with commercial properties in the past and have also become a method for purchasing a single family home in the residential market.

They work best when: 1) the owner wants to sell but does not have to transfer title right away; 2) or the seller may need continuing cash to pay fthe mortgage, 3) the house may be vacant or will soon be because the seller has already moved on, 4) the money from the sale is not needed immediately by the seller, 5) and, very important, the seller has equity in the property or has other income. When a seller's market is slow and a house with equity in it is not selling, a seller might consider this scenario from a renter/buyer.

There are advantages for both the buyer and the seller in this arrangement.  It's also important to use a good lease-option agreement which covers, among other things, the percentage of rent credit towards the down payment, the date by which the sale will close, and other clarifications concerning who is paying the taxes, who is maintaining the property (usually the seller), agreement on the final sales price. Tenants in this situation are more likely to treat the property very well since they see themselves as the future owners.

An advantage for the seller includes retaining the income tax deductions and having good tenants. The advantages for the buyer are getting into a house for little money up front (the amount is negotiable of course),  building up a rent credit towards a down payment, trying out the neighborhood, still having time to shop for the best mortgage or interest rate, and the possible benefit of the price being locked in if the value goes up.

The buyer must first find out what the seller's circumstances are, which a Realtor can definitely help out with, before spending time on making lease-option offers. In many neighborhoods, short sales are about 50% or more of the local market and many if not most of those properties will not have a seller who will be able to rent out the house at local market rent because their mortgage payment may be much much higher, and they do not have either the desire or the ability to carry a negative cash flow.

However, if an equity seller can wait 6 months or even a year for the buyer, it might be worth the wait.

For some additional explanation, see this general article about lease-options.

Attractive Loan Options

A lot of people are taking a look at the Best Places to Live lately.

First time buyers should know that there are programs returning to the loan market that have not been very active for some time. California's Housing Finance Agency has an excellent program which offers several features depending the buyer(s). In the past, the income caps on such programs were often too low to assist many buyers, but on this one, Los Angeles County guidelines allow over $80,000 annual income for up to two buyers, with higher amounts for 3 or more buyers and more units. The interest rates are more competitive than regular conforming loans, and there are features allowing for assistance in closing costs payments and down payment coverage through this program. And, this loan is available for a FICO score as low as 620, pretty unusual in today's loan environment.

FHA loans are still bound by the same loan limits--there has been a push to increase the loan limit for California due to the higher market. They also have a variety of features for down payment assistance and closing costs, however, HUD, this month, just disallowed the seller from helping on the buyer's down payment as their tracking showed there was a much higher default on this type of loan (this kind of assistance has never been available on conventional loans). But all the other loan options remain the same, including government sponsored assistance, employer assistance, and down payment from a relative. FHA loans require PMI which previously was not tax-deductible, however that changed as of January 1, 2007, making FHA loans more "user-friendly". They already have the advantage of having extremely competitive rates with certain programs. FHA loans basically have more liberal lending guidelines, including not using FICO scores (but they do look at the overall buyer risk profile), because their sole purpose is to assist buyers in need.

This IS a good time to be a buyer; and, if you're waiting for the market to come down before you buy, keep in mind that most buyers and sellers are about 2 years behind the market, so by the time you think it's a good time to buy, the market could have changed already. And real estate prices are local, so for updated information on pricing for an area you're interested in buying or selling, feel free to contact me for a market analysis.

Long Beach long beach real estate 'Voice this!

Can You Buy on $100,000 Income? Yes!

"The minimum household income needed to purchase an entry-level home at $504,080 in California in the second quarter of 2007 was $101,550, based on an adjustable interest rate of 6.29 percent and assuming a 10 percent down payment. First-time buyers typically purchase a home equal to 85 percent of the prevailing median price. The monthly payment including taxes and insurance was $3,380 for the second quarter of 2007." (California Association of Realtors, August 29, 2007.)

With downward changes in the market in some areas, the buyer affordability levels become a little more positive. The percentage of households that can afford to buy in today's market has increased one percent from the 2nd quarter last year to 24%. The index goes up a little more for those who can find that 100% loan that matches their buying profile, or for those who have a larger down payment than 5%.

In today's search in the MLS for just 3 zip codes in downtown, Belmont Heights/Shore, Bixby Knolls/California Heights areas of Long Beach (90802, 90803, 90807), a total of 203 condos and houses over 2 bedrooms came up under the asking price $504,080. On your monthly payment, add in HOA dues which are usually $200 at least for condominiums. For single buyers looking for lower prices in the $300,000 range, this figure does not include one-bedroom condominiums.

I am meeting quite a few people paying $2500-$2800 a month in rent. These are the people balking at paying perhaps a higher mortgage + taxes + insurance payment, but they're receiving no tax deduction benefit and no home equity. Tax deductions include mortgage interest, property taxes, plus other deductions (consult your accountant), according to your current tax margin which for a lot of people is about 35%. What a renter has, in a gradually shrinking rental housing inventory, is a 30 or 60-day notice to find a new home, and no long-term benefits.

Here you have at least 203 opportunities to buy in these 3 zip codes alone--why not search out all of your opportunities while you can look without pressure? It's much easier than the other scenario of limited time and uncertain choices.

Does Your Avocado Oven Scream "Fixer"?

According to this article it does. But I think it all depends on who you are (and the condition of the oven). If you're a retro person, the 1950's, 1960's, and 1970's may look like fun to you, or you may not care what year it was all made as long as it runs.

But to take into consideration all the things that go into pricing your property, "No Magic Formula" makes its point very well. Just as one oven doesn't predict a price, neither do other factors without considering the overall picture of size, number of bedrooms and bathrooms, amenities, condition, the current market trends, and location, location, location. Price may change 10% or more depending on whether or not the owner has an ocean or water view, or if the property borders a commercial area. It also depends on perceptions about an area or property, or whether or not the upgrades match area expectations. If every other house has an upgraded kitchen and bathroom, and yours does not, that will probably affect the selling price of your home unless you have other compensating factors that would be desirable to your buyer. That means you're waiting for just the right buyer and your house would probably sell faster if you had the upgrades that most of the other homes have in your area.

For buyers who worry about paying more than a home is worth (and there is no real estate cycle where this is not a fear), I could not agree more with the concluding quote of this article:

"Buy a home because you like it, you want to live there, and you're OK if the market goes up, and you're OK if the market goes down."

Is It Worth It To Buy Now?

That's the big question for some people. With the higher prices in housing in recent years, some people feel they are saving money by renting. One way to look into this question is to figure your renting vs. buying costs over time. "Over time" is a key phrase here because how long you plan on staying in your new purchase will make a difference, as well the amount of money you put down. Another factor, among several, to consider is the rental market in your area and what it will do in the future: will rents appreciate, and by how much? To check current market rents, check classified ads in your local paper. Another way is going to the "Rentometer" link on the right column. Knowing your tax margin and current interest rates on any investments or savings accounts are other features. The longer you plan on staying in a property, i.e., 5 or 10 years, the more likely you are going to save money by buying. So try this rent vs. buy calculator now, and come back to the link on the right later as you try out different scenarios.

Long Beach, Renting

First Time Homebuyers in Los Angeles and Orange Counties

There is a NEW First Time Buyer Program Available, through funds raised by Realtors and their Pacific West Association of Realtors who have contributed over $300,000 to this program--the “Opening Doors” program applications are available as of Monday, 2/25/2007. If you, or a member of your family or one of your friends, is a first time buyer, they may be able to take advantage of a new program that will give $5,000 up to $15,000 towards down payment costs.

Yes, there are guidelines and here are some basic guidelines:

Current upper sales price limits are $568,601 (non-targeted) for Orange County and $564,264 (non-targeted) for Los Angeles. Targeted areas have higher sales prices (geographic areas and income qualifications defined by California Housing Finance Agency).

Property areas must be within Anaheim, Anaheim Hills, Brea, Buena Park, Cypress, Fullerton, Garden Grove, La Habra, La Habra Heights, La Mirada, La Palma, Lakewood, Long Beach, Los Alamitos, Norwalk, Orange, Pico Rivera, Placentia, Rossmoor, Santa Ana, Seal Beach, Signal Hill, Stanton, Tustin, Villa Park, Westminster, Whittier, and Yorba Linda and nearby county areas.

Income limits generally are: Current limits for Orange County are $97,320 (1-2 persons) and $113,540 (3+ persons), and for Los Angeles County are $83,160 (1-2 persons) and $97,020 (3+ persons).

Minimum FICO score of 620 for all applicants.

This program is designed to help people who want to buy. For more detailed information, a lender referral, active listings, or an application form, please contact me immediately!
Long Beach, Homebuyer

Rent vs. Buy: Buying Is Better

According to the National Association of Reators, the Federal Reserve Board estimates that homeowners have a net worth nearly 36 times more than that of renters. Over the past 10 years, the cost of rental housing in the United States has increased an average of 3 percent per year; average rents are projected to rise 4.1 percent this year alone. With a 3 percent annual increase, a current rental payment of $1,000 per month would increase every year and amount to $137,567 after 10 years, with no wealth accumulation.

In contrast, a $210,000 home purchased today with a downpayment of $10,000 and a 30-year fixed rate mortgage at 6.5 percent would cost a steady $1,100 per month and yield a net worth of $138,521 after 10 years, assuming an historic 4.5 percent annual appreciation rate.

Rent Increases in State Outpace Much of the West

Average rents in Orange County and Los Angeles County range from $1400 to $1600 a month, and may increase approximately 6% this year. A strong economy is one of the reasons, but the conversation of over 11,000 apartments into condos is another. In recent years low interest rates allowed many renters to become homeowners so rents were not raised, but now with home prices and interest rates rising, renters are stalled as landlords raise rents to match the current market. And until more multidwelling units are constructed, a shortgage of rental units allows some landlords to play catch-up to the tune of rent increases of several hundred dollars a month.

That First Home

Dream homes are great to dream about, but please don't expect everything without the money to match. Expectations that are too high might cause the first-time homebuyer to miss a golden opportunity. If you've been renting and don't have much equity, the smart thing to do is look into the future at the second or even third home as the one that really represents where you want to be. People believe their parents did the right thing by buying, but many people forget that their parents may have also built up the move-up over time.

Financial coast David Bach says, "... renters may need to take a step backward when buying their first home. It's almost always better to cut the renting cycle as soon as you can and to continue to upgrade from there," he said. "Buy what you can afford now, build equity, and move closer to that dream home."

With today's loan products, there is ample opportunity to get into that first property, where you realistically may not be staying for more than 3 to 5 years, so remembering that, compromising on home features may be easier to do. Read this article about the Wells Fargo buyer survey.