How Is Housing So Strong Right Now?

If you're a potential buyer or seller sometime in the past year, you've had some experience with Property Entry and Advisory Declaration (PEAD) forms, required for all prospective buyers to sign before entering a listed home on the market. 

PEAD Data

To backtrack a little, both the national and California economies have recovered, and COVID figures are on the decrease at this time.  Looking back to Feb.-April of 2020, earning data shows that job losses for people earning over $100,000 annually were at 12%; job losses for earners under $100,000 annually were at 88% -- the retail, food industry and other service jobs were the hardest hit, while the other job categories over $100,000 income were not hit nearly as hard.  Interest rates are at historic lows and are likely to stay that way for sometime to come.  Mortgage applications dipped last Spring, but climbed way up in January 2021, all of which is fueling home sales in 2021.  California saw a 22% increase over last year in number of homes sold, over 484,000 in one month (but compare to January of 2005 when over 600,000 sold).  

In December, 2020, total California home price rose to $717,930 (+16.8% from last year); fueled also by low inventory (-48%), leading to median of 11 days on market and a list-to-sales-price ratio of  100.1% (+1.9%). 

Southern California home prices have increased to $650,000, overall, over 16% since one year ago,  and sales have increased 13% year over year: By county, OC at $971,000; LA at $697,660; Riverside $495,500; San Bernardino $390,000; San Diego $730,000; Ventura $776,000.

This is the strongest growth in California in 7 years.

Only 5% of sales are all cash, but two of five homes were sold to first time homebuyers.  And 33% of those 1st timers had more than 20% down payment!!  Yes, parents, friends and family are helping them out. 

So as the charts above show, showing traffic shows the homebuying momentum as the PEAD forms are tracked in various counties.  Lately the showing pattern is: put home on market mid-week, showings take place at 15 minute intervals Friday, Saturday, Sunday, offers are due in Sunday or Monday, by Wednesday of the following week, the buyer is found.  Needless to say, winning offers are completely documented with solid loan pre-approvals and proofs of funds.  This is a hectic time for buyers who must compete and be prepared (on some properties) to overbid. 

With the lowest housing supply in years, most sellers who can think about making a change will get showing activity.  If you're wanting a home value estimate, this is a good time to contact a Realtor.

See the complete housing report here
 

 

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

May Market Mayhem - State and Local

Statewide, California home sales fell to their lowest level since November 2007.  May sales of single family homes was down over 41% from one year ago, and down 13% from April of this year.  However, pending home sales (properties in escrow) were up  67% in May.

Part of the problem, besides the general effect of pandemic slowdown, is housing supply, per CAR:

"All major regions recorded a decrease in housing supply of more than 25 percent, with both the Southern California and the Central Valley regions falling by more than 33 percent. All counties in Southern California, except Ventura, declined 36 percent or more from last year, with San Diego dropping the most at 42.7 percent. The Bay Area also experienced a significant housing supply decline, but at a relatively smaller degree compared to the Southland. Eight of the nine Bay Area counties recorded a decline in active listings on a year-over-year basis in May, and six had a decrease of more than 25 percent. San Francisco was the only county in the region with an increase in active listings from last year."

Additionally, SoCal home price unchanged: 

"Median prices continued to dip in May from last year in the Central Coast and the Bay Area but inched up slightly in the Central Valley region. The median home price was virtually unchanged in Southern California."  

Locally, prices continue upward, and anecdotally, buyers continue to experience multiple offer situations.

Long Beach median single family home price         $740,000, up 13%

Lakewood median single family home price            $649,000, up 8%

Bellflower median single family home price            $575,000, up 4%

Signal Hill median single family home price            $1,215,000

Rossmoor median single family home price              $1,349,000

Cerritos median single fmily home price                    $765,000, up 6%

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

Takeaways From the PWR 2020 Economic Summit

About 1,000,000 people have left California since 2010

• Pacific West Association of REALTORS held its meeting in  Garden Grove today on current real estate topics state wide and locally:  
• There are two Proposition 13s coming up:  One is a new proposition on the March 3rd ballot dealing with a bond for school construction debt; the other is the well-known Proposition 13 issue from 1978 appearing on the November ballot and dealing with the Split Roll Tax Initiative where commercial properties, not residential properties, would be restructured for their property taxes if voted in, with the objective of commercial properties paying higher tax than currently (did you know that over time residential properties have been increasing thereby carrying a tax burden not enjoyed by commercial properties).  Don't confuse the two.
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• Proposition 5 will hopefully obtain enough signatures to be back on the  November ballot, and partially rewritten from its last ballot appearance when it was defeated.
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• The State is in the longest post recovery period from a recession ever, over 10 years!
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• The U.S. unemployment rate is down to 3.5%, the lowest rate ever; while the overall California unemployment rate is at 3.9%, but this varies by county.
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• The corona virus effect is global, and is affecting the supply chain around the world, for instance, Toyota in China is just one of many places currently unable to produce for the world market. The next 6 months may see continuing impact, globally and locally, even affecting prospective foreign buyers here.
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• The California population was 20 million in 1970, it's now double that at 40 million people.
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• The housing market typically slows before major elections, there is no correlation to political parties.
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• Housing prices are most often referred to when dealing with "up" or "down" trends, yet the  annual number of residential transactions hasn't changed for the last 10 years!
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• From 2003 to the present, home prices have increased by 53%!
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• Where are sales headed?  Perhaps with higher prices, but not with more inventory.  Inventory has been constrained at the same level since 2012.  May now be the new normal at 2-3 months of inventory.
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• Statewide, the average time on market is 28 days; in the ultrahigh luxury market, the average time on market is 39 days.

•  Many college age young adults want to be able to buy their own home.
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• Buyers want a "Pinterest" home, their expectations are high.
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• The Los Angeles County median home price is $641,000; the Orange County median home price is $840,000, with the lowest inventory in 15 years.
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• Where is the fastest rising price increase?  City of Norwalk.
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• It's predicted that by 2025, California will be a majority renter state.
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• California property owners need to change their image of what increased density might look like in their neighborhood--developers too.  New multifamily housing does not have to have the "cell block" look, there are more elegant designs which could blend well into single family home areas.

REALTORS are represented in 90% of sales, a figure that hasn't changed in 30 years.

Thanks to Leslie Appleton -Young, California Association of REALTORS Chief Economist.

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

The Overall Picture for Long Beach Area Real Estate for 2013

The market has increased in price! 2013 saw upward jumps in most areas for the average annual sales price of a single family home:

• Long Beach, increased to $489,000, +18%.
• Cerritos, $605,000, +11%.
• Lakewood, $420,000, +17%.
• Huntington Beach, $803,000, +10%.
• Signal Hill, $600,000, +13%.
• Los Alamitos, $686,000, +9%.
• Seal Beach, $947,000, +25%.
• Cypress, $532,000, +17%.
• Norwalk, $318,000, +17%
• La Palma, $576,000, +18%.
• Bellflower, $356,000, +15%.
• Garden Grove, $443,000, +17%.

Along with price increases, there are: multiple offers as new buyers compete with each other and with investors, all cash purchasers, inventory shortages, sellers reaching for too high a price in some cases, an overall upward movement in mortgage interest rates, new lending rules which may have a tightening effect for some borrowers, and more buyers in the market who are emerging from a past foreclosure or short sale and are looking to buy again. And, appraisals continue to be an issue.

Keep in mind, pricing for condos, and 2-4 unit properties would be different, and should you want to know specific pricing for your city or zip code (south Los Angeles County and north Orange County areas), please contact me. 
This data is current as of January 6, 2014, and all data comes from the MLS.

National Association of Realtors® 2014 Housing Prediction

 The annual National Association of Realtors® announced the annual housing prediction at its conference this November in San Francisco. Housing price is predicted to increase by 6 percent in 2014, banks are criticized for being too restrictive on mortgages, there is still too low of a housing inventory, and with rising mortgage rates refinancings will drop significantly.

In a presentation about the housing market on a nation-wide basis, on November 8, Lawrence Yun, chief economist of the National Association of Realtors® said:

• Existing-home sales are expected to retain the healthy gains seen this year, while prices will stay on an uptrend in 2014,
• Existing-home sales have shown a 20 percent cumulative increase over the past two years, while prices have gained 18 percent, but incomes have risen only 2 to 4 percent in the same timeframe.
• Yun said. “While the median-income family in many areas will still be well positioned to buy a home in 2014, income is barely budging given growth in consumer prices.” 
• Yun said the other headwinds moving forward include limited inventory conditions in many areas and mortgage lending standards that are still unnecessarily stringent. “Although home sales have recovered over the past two years, mortgage purchase applications have been flat for the past four years, even with rising sales,” he said.
• With higher mortgage interest rates, he expects refinancings to collapse in 2014 to the lowest level in at least 15 years, and hopes purchase applications will begin to rise. “This is an incentive for banks to increase mortgage origination, especially considering the low default rates in recent years. But even with cheap mortgages for the past four years, all-cash buyers stayed high, accounting for over 30 percent of sales,” Yun noted. 
• Yun said banks are holding onto funds for potential Department of Justice lawsuits, rather than making them available to mortgage borrowers.
• Existing-home sales this year are forecast to rise 10 percent to nearly 5.13 million, but should hold fairly even at about 5.12 million in 2014. 
• The national median existing-home price for all of 2013 will be up just over 11 percent, to about $197,000; then increase nearly 6 percent next year.
• Yun expects the inventory shortages to be felt again next spring. “Housing starts are the only way to alleviate inventory shortages,” he said. “Housing starts need to rise 50 percent to meet underlying demand.”
•  Mortgage interest rates are expected to trend upward and reach 5.4 by the end of next year.
• “If not for the housing recovery, we could be on the verge of a recession,” Yun noted. “The rent component of inflation is rising, so the only way to tame price growth is new home inventory.” 
  
•  John Krainer, senior economist at the Federal Reserve Bank of San Francisco, who said near-term economic momentum is weakening, but improvement in growth is expected going forward. “Inflation has been subdued, and is expected to remain below the Fed’s 2 percent target over the next few years,” he said. “Despite improvement in the labor market, the unemployment rate remains elevated but will be falling slowly.” 
• Krainer notes improved household net worth, aided by rising home values, is supporting consumption spending, but home sales and inventories are not growing as expected. “New-home sales are significantly underperforming, and have been bouncing around World War II lows,” he said.
• “There is a big disconnect between rising home prices and inventory slowing down,” Krainer said. Normally, higher levels of new construction would be expected in a rising sales environment.
• Krainer notes there is a relationship between the share of underwater mortgages and the number of homes for sale. “In markets where we saw a high percentage of underwater home owners, we also saw lower inventory levels.”

See full article at Realtor.org

Increase of 24% in November Home Values in California Since 2011

November median prices for home sales in California have increased by double digits compared to one year ago, and the number of sales have also increased on a year-over-year basis as well.

Higher priced homes sold at increased numbers in November, even as sales declined overall in lower-priced areas due to fewer homes available for sale. In the Long Beach/Lakewood/Cerritos area, homes under the $500,000-$450,000 range in particular have sold very fast with multiple bids.  The California statewide median price for a single family detached home increased in November to $349,300, up from October's median of $341,370, an increase of 2.3%.  November's median price was up 24% from the November, 2011, and that is the biggest year-to-year increase since June, 2004!

Additionally, California's inventory for single family homes is down to 3.1 months overall (in some areas such as Riverside County, it's far less), and this is a decrease from 5 months of inventory one year ago.

Interest rates have dipped further to a November average of 3.35% for a fixed-rate 30-year mortgage; and it's taking fewer days to sell a home: an average of 37 days compared to 56 days one year ago.

Long Beach Housing Inventory Graph
 

In Los Angeles County, the median price is $337,000, an increase of 15% from one year ago, with the unsold inventory index at 2.9 months, down from 5.6 months one year ago (that means all existing unsold housing would sell at the current rate of sale within 2.9 months if no new listings come on the market--six months of inventory is more the number we should have.) And, this picture on inventory is not unique to Long Beach, it is typical of the local cities, county, state and national status of housing inventory.

As a side note, appraisals and buyer's lender financing issues have not away, which are topics for another post.
With the increase in prices, more homes are getting a little more equity--to find out what your values could possibly be, please find out your home's value from current and complete information directly from our Realtor MLS and tax inventory.  Even if you have no intention of selling in the near future, you may need market information about your property for a variety of reasons, such as re-financing, planning an estate, or just for your own information.

P.S. For a little Christmas spirit, see my photos of a few decorated houses at www.facebook.com/longbeachhomesandcondos -- and "like" me too.

What's the 2013 Prediction for California Home Prices?

Assumptions:

The PITI is based on the prevailing median price in the

2nd Quarter 2012. The PITI is calculated based on an

 underlying effective FRM interest rate of 3.92%,

 a 20% downpayment,

and corresponding loan amount.

The monthly rent is derived from

RealFacts Q2 2012 estimates for a

3bd 2ba average asking rent.

The California Association of Realtors annual conference was held earlier this month in Anaheim.  The 2013 Forecast extensively covered all phases of the residential market, with a total of 136 PowerPoint slides as part of CAR economist Leslie Appleton-Young's annual presentation. 

At the closing section, Market Opportunities for 2013, four points were made:  1) Home prices are rising, but still very attractive; 2) Look for return on interest for investment opportunities; 3) interest rates are at historic lows; and finally, 4) first-time buyers: rent v. buy?  Do The Math!.

The current story for many buyers and sellers has twists and turns all along the road, but it's still a time to not be passed up!

For California, the median price of a single family home is projected to rise in 2013 from $317,000 at the end of 2012 up to $335,000 in 2013.  At this point, buyers are more optimistic than sellers about future home prices:  49% of sellers think prices will go down in one year, and 9% of sellers think they will go up.  But while 49% of buyers think prices will stay flat, 25% of buyers think prices will go up.  And those buyers are probably going to be right--last year the projected price increase for 2012 was for a 1.7% increase, but the current projected actual increase by the end of 2012 is 10.9% increase.

Median home price for So Cal Counties

The median home price in Los Angeles County went up over 10% from August 2011 to August 2012, with REO sales making up only 12% and short sales making up 24% of the total sales in August 2012.

Every Day There is Another Story That Housing is Recovering, and Then It's Not: Read More

What is the real story on short sale numbers and borrower delinquencies? The story seems to vary on a daily basis.

But according to the Mortgage Bankers Association, which keeps track of these statistics, the delinquency/foreclosure rate was still 11.33% as of the end of the 1st quarter of 2012.  That's the lowest since 2008, but is still a lot of homeowners on a national basis.

Sellers, Buyers Are Competing With Multiple Offers

Did you know that Long Beach and surrounding areas have less than two months of inventory?
This chart covers up to 2011, and the trend of multiple offers in the lower price ranges is even stronger in 2012.
Think you can't sell?  Think again, and call me.

Opportune Time for Buyers.

National Association of Home Builders comments on the current market, both for new housing and existing homes. Prices nationally --and locally -- have returned to the 2003 levels. NAHB believes there is price stabilization in many areas of the country. Future household formation--which has slowed in the current economy--will eventually demand more housing. This is the "opportune time for buyers" because buyers who are motivated to buy and are qualified at this time should take advantage. Los Angeles County, though experiencing fewer sales than one year ago, has not lost in the median price point of a single family homes since one year ago: Year-to-date in LA County the median price of a single family home is $340,000, Click on the video for more on housing market conditions currently.

The Long Beach Market Inventory Slips Below 6 Months Supply

For February 2009, out of 11 zip codes in this report for Long Beach, only one zip code area had slightly more than 6 months' supply of inventory--in some areas the inventory for detached housing was as low as 1.6 months supply. This is a definite decrease from December 2008 when the months' inventory spread was from 2.9 to a high of 9.1 months of supply.

For attached housing (i.e., condos) the inventory supply is more: Across the same zip codes, the months' supply extended from 2.0 to 7.6, with the biggest inventory for condos under $400,000.

Comparing all of Long Beach to detached properties (houses) in other cities, Long Beach has 3 months inventory supply overall, which is more than La Palma, Cypress, Lakewood, Cerritos, La Mirada, Buena Park and Norwalk have, in that order. La Palma is down to .9 months of inventory left, overall. However, certain price categories may be different than the overall picture: for instance, houses in the $300,000 to $400,000 price range in Cerritos have 6 months, the greatest amount of supply, with some higher price ranges down to 1.1 months of inventory supply.

As you might already know, the 6 month line in real estate cycles is nationally considered the benchmark between a buyer's or a seller's market, so for some locations in these cities, choice for a buyer may now be more critical than in the past 2-3 years. "Supply and demand in the housing market is considered balanced when the inventory settles at about six months," according to the National Association of Realtors.

At least two reasons for this decline in inventory are great difficulty for buyer qualification for loans and loan origination guidelines which are increasingly stringent; and/or sellers not getting their price and thus taking properties off the market.

So for sellers who are ready to take advantage of this market, whether you're selling short or you've got equity, you may find a buyer!

"Mansionization": Which Home is Largest-of-All?

Under discussion for much of this year, the Long Beach City Council's agenda last night finally brought it to the city level. Citizens from neighborhoods such as The Ranchos, Belmont Shore and Belmont Heights have been most vocal about the impact of built-out remodels or rebuilds on the character and "feel" of their neighborhoods. It's not too difficult to find throughout Long Beach (or adjacent cities) many examples of houses which are built out to the maximum in lot coverage with as little setback as possible, in the trend to have the largest home possible in a given amount of space. Where a neighbor saw a tree in his neighbor's yard, he now might be able to reach out and touch the neighbor's new second story wall. As real estate appreciates, so does the desirability of location, location, location, and many owners felt there was an advantage to tearing down the old and rebuilding today's desirable floor plan. So does the owner have all the rights here, or do other area residents who chose to invest in a neighborhood partially because of it's architecture, age, density level (or lack of), and general "comfort" level with the street.

So the City Council last night voted 8-0 on a motion concerning Belmont Shore and Belmont Heights which proceeds which a current interim ordinance limiting construction to two stories (there have been many 3 story remodeled houses in the Shore), and further study reducing the number of variances allowed, the appropriateness of decreased turning radius for cars with homes on alleys, architectural projections, front yard setback, standards for remodels and new construction, using community involvement on design guidelines.

For some owners, just as when some areas voted to become historic districts in the 1980's and 1990's, these guidelines may be viewed as too limiting and an infringement on their property rights and change what they view as "functionally obsolete." It's a valid point--for hundreds of years people have built their homes in a way that fit the social structure of the time, sometimes long after that social structure was gone and "custom" took over. How do people upgrade a floor plan they believe is "functionally obsolete" but then not infringe on their neighbor's privacy? The other question is, do people need as much space as they think they do? I think a big question centers on privacy and desire for personal space especially in metropolitan areas which have seen their populations grow drastically. They're squashed in on the freeway to get home, and now their big plasma TV does not fit in that little 1928 or 1952 living room.

But will this really prevent sales? I don't think so--I think people in these neighborhoods will ultimately find a balance between living in a temperate climate vs. their lifestyle and available resources. (Photo is California bungalow in Alamitos Beach area, the kind of house that some people love and look for, other people think is way too small.)

Long Beach long beach real estate 'Voice this!

Long Beach Housing and Traffic

City government sometimes gets lost in the shuffle of the more immediate concerns of day-to-day life, foreclosures, media coverage of housing, more foreclosures and homeland security. But it shouldn't be, because your local areas are often under one sort of study or another over a period of years.

The traffic congestion in the area of 2nd St and Pacific Coast Highway yesterday afternoon was huge coming through Belmont Shore, over the bridge towards the 405 Freeway after the conclusion of weekend recreational events along the shoreline. What perhaps a lot of people don't know is that this intersection has been the subject of a study called the South East Area Development Improvement Plan since the 1970s, a study that has been in the process of renewal and updating, and broadcast at local community meetings. The latest studies include wetlands restoration, bike paths, changes in local shopping areas, and the addition of new housing. Lennar Homes, for instance, has had a proposal for housing development in the location of the Seaport Marina Hotel for some time. Take a look at this informative slide show by the City's SEADIP Advisory Committee for ideas that may impact your living, driving, biking or shopping in that area.

Long Beach

Housing Opportunity: Think About It

Industrial vs. commercial vs. housing use: This is one of the stories in Long Beach. As in some other cities, downtown Long Beach is building up its mixed retail/residential use most recently through loft conversions, and residential-over-retail use. But still, we have a housing shortage, not just here, but throughout the state--an estimated and predicted shortage that's been no surprise for at least a couple of decades to certain economists. It's supply vs. demand, and it's one of the reasons that the median price in Los Angeles County still increases at this point. While the inland counties such as San Bernardino and Riverside have suffered more due to foreclosures, the Long Beach area and the subprime loan fallouts is far less involved and remains overall far healthier, in spite of the increase in housing cost in this area. Downtown retail is still growing; the local office market is strong.

“We’ve obviously had a huge pull-back, but I think people feel there are opportunities on the horizon because mortgage rates are still quite attractive and there’s still a lot of inventory on the market,” Kyser says, “but at the end of the day, the irony is you still have an overall shortage of housing in Los Angeles County . . . of about 290,000 units, as well as a huge lack of affordable housing." Jack Kyser, chief economist of the Los Angeles County Economic Development Corporation.

It's still a good time for property buyers to buy, and to take the long term view.
Long Beach

Second Largest in Population

Just a quick note: The West and the South are the two fastest growing areas, and the only region with more people than Los Angeles County is New York, according to the Census Bureau. Supply vs. demand seems to dictate a constant need for housing in these highly populated areas well into the future, especially in California, since Riverside area is the fifth-largest growing area in the U.S. in population.


Long Beach