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

2020 Cost vs. Value Report for Los Angeles Area--Or How Much Do You Recoup?

Kitchen remodel

This annual report by Remodeling Magazine (Remodeling 2019 Cost vs. Value Report”, www.costvsvalue.com) comes out on a regional basis. In case you could be a first time seller, it's important to remember that what a project costs is not usually how much it's valued in the market.  The local market sales prices of similar projects determines value, or what the consumer is willing to pay for all the seller's hard work.  This projection fluctuates in these annual reports--starting in 2008 up to the present, the cost recoup percentages range between 61%-72%.  The final overall figure for 2020 for the L.A. area is 63% for a project that cost about $65,000. This is explained as a result of a "shaky decline over the last six years in the cost recouped for these remodeling projects" due to consistently rising project costs.

Another variation from year to year is what type of project brings the best return.  On the national level, several years ago it was new garage doors, for 2020 manufactured stone veneer brought in the highest recoup at 96%, with garage doors still high at 94%.   The lowest is upscale rendition of a master suite addition (once a very popular project) at 52%. Kitchen remodel is more profitable at the "minor remodel" level. Vinyl window replacement is almost at the upper 25% in replacement value.

For the Southern California/L.A. area, the highest individual project returns are minor kitchen remodel at 105% return ($26,000 cost); steel entry door replacement at 106% ($2000 cost); garage door replacement at 123% ($3800 cost); manufactured stone veneer at 130%; vinyl window replacement at 102% ($19,000 cost).  Roofing replacement for asphalt shingle of $30,000 cost was recouped at 92%. But a metal roof replacement only received 79% of a $48,000 cost, which in a high fire zone might be more highly valued.  The West Coast, interestingly, received the highest return on manufactured stone veneer (new item in this year's report) out of all the regions.   Interestingly, bath projects ranked lower than the minor kitchen projects (does everyone already have a new bathroom?), in the Pacific Region.  For definition of major and minor projects, just take a look the report at the link below.

For selling in the near term, just think of how to give your home exterior and interior appeal and how these projects might help you do that.

For the entire report, go to the 2020 report.

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

2019 End of Year Single Family Home Activity for Los Angeles and Orange Counties

Los Angeles County 2019 Review for SFR

The thing to remember about statistics showing data drawn from December to December (as these diagrams show) is that the market is usually slower, lower, etc., at the end of the year compared to the middle of the year, so comparisons from December to the following August could show a little differently.

Sales volume is up in Los Angeles County, while the number of active listings is down, but the median and average home prices continue up--meaning that there's decreasing inventory with sales prices driven upward.

Closed Volume
  $7,812,678,480 | +27.4%;
Average Price
  $1,004,807 | +9.4%;
Active Listings:
  7,787 | -35.1%; (13,579 in June)

  

Orange County 2019 Review for SFR

In the meantime, in Orange County, sales volume is also up percentage wise, but the total dollar amount is approximately half of Los Angeles County (OC is about one-third the population of LA County).  The average single family home price compare in both counties.


Closed Volume
  $3,307,614,666 | +36.5%
Average Price
  $1,092,343 | +1.9%
Active Listings
  2,963 | -34.6%  (5,846 in June) 

Take note:  In both counties, months supply of inventory dropped over 35%, to less than 2 months, and at the peak in May, inventory supply was not over 4 months supply.  In both counties, houses sold within 2% of the original asking price, so overall housing market prices are holding steadily.

For an evaluation of your home, condo, or residential unit property, please contact me by phone, email or text for for information on your property.

Data provided by InfoSparks, CRMLS.

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

Snapshot Market Review of Long Beach Nov. 2019

Long Beach in November

According to data from CAR, there were fewer active listings in November compared to one year before, but an increase in sales compared to one year before., and an increase in median price.  But there's also one-third of the active listings with reduced prices, suggesting that more sales occur from reduced prices! Although this chart doesn't reflect a breakdown, the higher priced luxury listings are lagging and are more likely to have price reductions,  compared to the non-luxury listings.

The Report for Los Angeles County shows similar trends: increase in home sales, increase in median price, decrease in active listings and similar percentage of inventory with reduced price.

Los Angeles County in November

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

Market Prices for November in Long Beach, Huntington Beach, Lakewood, Cerritos, plus Three Counties

Looking for Remodel ideas?

All these prices are for the month of November, 2019, based on data from CRMLS Infosparks:

Average prices for single family homes in Orange County are still showing a slow downward trend since May, 2019, while Los Angeles County is still up from earlier in 2019, and San Bernardino County's average is continuing to the highest average in the last 5 years! This is a buying opportunity for many right now.

The average days on market for the four cities is between about 20 and 50 days.  However, in the very high end markets in Long Beach, properties over $1 million are now generally on the market longer than those under $1 million.  In comparison, prices for the 236 actively listed Long Beach houses under $1 million are currently at 49 average days on market at an average list price of $657,000.  More buyer opportunity in this range!

Luxury Market:

There are currently 68 active single family homes (as of 12/3) listed over $1,000,000 in Long Beach, the average days on market is currently 91.  There are currently 36 properties in escrow, average of 104 days on market.  If you have a listing over $1,000,000, it might be taking a little longer to sell than earlier in the year, but also not unusual for this time of year.

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

November, 2019

Long Beach
$734,340 (down from October)       Avg Days on Market :18 (down from Oct.)

Lakewood
$606,335 (down from October)       Avg Days on Market : 22 (down from Oct.)

Cerritos
$811,173 (up from October)            Avg Days on Market :39 (up from Oct, down from July)

Huntington Beach
$1,143,086 (down from 18 month high)   Avg Days on Market : 50 (highest since Feb. 2019)

Los Angeles County
$955,098 (down from July and October)  Avg Days on Market : 37

San Bernardino County
$383, 071 (September was highest avg of last 5 years at $392,195)  Avg DOM : 27 (down from Feb.)

Orange County
$1,040,012 (down from May)                  Avg Days on Market : 29 (up from May)

The above prices are for single family homes, please contact me for condo market prices!

The graphic above may give ideas on remodel projects if you're thinking of selling.

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

Are Long Term Homeowners Staying in Their Homes Just To Spite Their Kids?

The baby boomer generation takes a certain amount of flak for not moving on and selling their current home that they've lived in for so many years, and the younger generations equally so for supposedly not being interested in buying.  Lowest mortage rates still do not seem to be incentive enough for bringing buyers off the shelf. There's a lot of labeling that goes on as people search for answers, and a lot of misinformation and misunderstanding.  The economics of the housing market is a compilation of factors over time, and doesn't amount to just any one thing, like being too selfish to sell, or too disinterested in buying. Tax issues, for example, are putting a squeeze on long term owners, known as the SALT cap, mixed with being faced with being forced to move up to higher prices in California, if they stay here. For these and other reasons, the fact is that owners are staying put about twice as long as the average stay about 15 years ago.
And, there's even a current projection now, that in spite of the long term squeeze on inventory, the future may bring so many houses on the market from the baby boomer generation that there may not be enough buyers from the later generations to take up the slack.

For sellers who do decide to sell, and find a less expensive market to move to, it's wise to be practical in pricing.  Still, home sales in California continue to show mild growth overall, since mortgage rates continue to be favorable for buyers.

If you are interested in finding your home's value, please contact me.  I have been helping buyers and sellers achieve their goals since 1994.

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

"Pocket Listings" Just Can't be Pocketed Anymore

The National Association of Realtors has just voted to ban this practice, a rule that is long in coming.

Called the "MLS Clear Cooperation" policy, it calls for all listings taken by Realtors for their sellers to be entered into their member MLS within one business day of marketing the property to the public.
The current rule, to be effective January 1, 2020 and implemented May 1, 2020, is as follows:

 Within one (1) business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is not limited to, flyers displayed in windows, yard signs, digital marketing on public facing websites, brokerage website displays (including IDX and VOW), digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public.  (MLS Statement 8.0, NAR Handbook on Multiple Listing Policy)

The implementation of this rule is considered to be in the consumer's best interest, which means his/her property is exposed on the multiple listing service to a broad audience of prospective buyers and their agents, rather than the creeping practice in many highly competitive markets of keeping listings restricted to certain groups, and not known to the general public. This practice is completely contrary to the entire purpose of the multiple listing services across the country which exists for broadcasting of available properties and brokers cooperating with each other on the buying and selling of bona fide listings.  This new rule does not mean at this point that a seller cannot take a listing and then get a little more time to prepare before allowing buyers to view their home, it does mean that the property may not be marketed as described above until it is placed into the MLS (multiple listing service) to which the Realtor belongs. Doing so actually gives the consumer the most exposure on the market. To illustrate, in San Francisco, the share of homes selling as pocket listings increased 68% between 2010 and 2018. By keeping properties off the open market, and thus fewer prospective buyers, sellers ran the risk of losing offers. 

The work and final submission of this new rule did not happen in a vacuum, there is a 130-person Multiple Listing Issues and Policies committee for consideration, and if approved, the proposal moves on to NAR’s 900 member board of directors for final ratification.



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

Another Interest Rate Cut to the Federal Funds Rate

What does it mean for home buyers and owners when the Federal Funds Rate is lowered?   (More information is on Investopedia about the Federal Funds Rate, which is what banks charge other banks.) This Funds rate doesn't directly impact mortgage rates, which are hard to predict and are more closely tied to mortgage-back securities and 10-year Treasury notes, but the Fed rate can impact adjustable rate mortgages and home equity lines of credit, and credit cards.

So in this larger picture are still historically low rates for home buyers, which means increased purchasing power because of the lower rates, refinancing to eliminate mortgage insurance or to get a lower rate, consolidating debt, or utilizing home equity to fund home renovation.  So if you were pre-approved 6 months ago, for example, but haven't made a move yet, go back to your loan officer to renew your buying potential, it may have improved!

If you are interested in selling to move up or move on, or looking to purchase a home, please contact me for more assistance!



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

California Association of Realtors Housing Market Forecast for 2020

Here is a summary of the 2020 California Association of Realtors Annual Report presented at the annual trade show in September, 2019 in Los Angeles:


Talk of recession:  Housing is not going to be the cause, but it could be due to global economics, trade wars, geo-political crisis, and/or stock market correction.  It could happen sometime in the future, there is no timetable.

According to a 2018/2019 Google Consumer Poll, 46% of 300 people thought it was a good time to sell.

According to CAR's 2019 Housing Survey, though, 47% of properties in escrow fell out because the buyer decided not to buy, the next highest number was 6% representing people who did not qualify for a mortgage on buyer's terms,  down to 1% for seller deciding not to sell.

Unemployment is at the lowest rate in 50 years, with Los Angeles County and Orange County at 4.5% or lower.
Interest rates are at historic lows, will remain lower in 2020, per this report.

Nonfarm job growth in California is lower than 2015, under 2%, unemployment lower than 2015, the population is almost 1 million higher than 2015, and population growth at .5% is lower than in 2015.
The highest sales volume is in the $500k to $749k range in California, with 46% of house sales taking place in Southern California, although sales growth in all regions is down compared to previous year.

The California median single family home price for existing homes was at an all time high in August of 2019, at $617,410.  The SFR inventory supply improved only at the upper end of the market, so prices over $1 million and $3 million increased 4.5% and 10.8%, respectively.   Houses under $299,000 decreased by 17.5%, with inventory decreases in price ranges all the way up to $999,000.

Overall, for the last 15 years California's sales are mostly flat, in spite of a strong economy, low interest rate, and low population growth.

Why?  Well, because fewer permits were issued :  in 1988 over 255,000 permits to build were issued, while in 2018, just over 114,000 permits were issued, while the population grew about 12 million in that time period.  Limited land, density resistance, project review delays are all possible contributors to this condition.

In spite of rates dropping, buyers mortgage applications are down, and the projection is that by 2025 California will be a majority renter state.  Los Angeles and Long Beach already fall into the 60% plus range for renters out of the total population.

The market is not as competitive as in previous years, less than half of sales received multiple offers, compared to 2013 when about 70% of listings received multiple offers. Outmigration to other states continues, 750,000 people have left since 2010, with San Bernardino and Riverside Counties being popular relocation spots, and there are fewer investor flippers in the market, and fewer investors are selling their properties.

Sellers are staying put, average time in a home is now 11 years, much longer than in 2005 when it was about 5 years in the home.

And so where are we in the end for 2020?  Here's the summary chart:  The California median price is predicted to be $607,000 for a single family home (statewide) with a 2.5% increase in price growth, far lower than 2017.

 

For the complete report in pdf format, you may download here: CAR Housing Report  by looking for the link to the report on my Market Trends Page.


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