It's the Time of Year For Termites in Southern California

 Graphic of ant and termite

Termites often swarm at this time of year, which will expose properties to the damage they can cause.

It's not surprising in my experience to find that an owner may have owned a property for years, but has not done a termite inspection since it was purchased, let alone any repairs. Keeping up with pest control on an annual basis, or biannual basis, can save money.  Tenting or even local wood repair alone may cost thousands, what used to be a $2000 tenting/repair cost a few years ago is now $4000.  So try to avoid this major cost (whether you're selling or not) by taking care of moisture issues and soil contact issues:

1. Eliminate or reduce moisture in and around the home, which termites need to thrive.
   
2. Repair leaking faucets, water pipes, and exterior AC units.
   
3. Repair fascia, soffits, and rotted roof shingles.
   
4. Replace weather-stripping and loose mortar around the basement foundation and windows.
5. Divert water away from the house through properly functioning downspouts, gutters, and splash blocks.
6. Routinely inspect the foundation of a home for signs of mud tubes (used by termites to reach a food source), uneven or bubbling paint, and wood that sounds hollow when tapped.
7. Monitor all exterior areas of wood, including windows, doorframes, and skirting boards for any noticeable changes.
8. Maintain an 18-inch gap between the soil and any wood portions of your home.
9. Consider scheduling a professional inspection annually. Wood-boring insect damage is not covered by homeowners insurance policies. 
10. Store firewood at least 20 feet away from the house. *
    

There are different kinds of termites, and vary according to region.  In Southern California subterranean and drywood termites are often seen, but dampness draws in termites also.  Amazingly, termites may not just work on wood, I once saw a house in Long Beach with concrete slab foundation for an added family room that was literally crumbled underneath the carpeting from termite damage after it was pulled back, and walking over the carpeting caused a scrunchy sound.

And, if you're thinking of selling, termite damage repairs are considered negotiable in the standard CAR contracts, but most buyers will ask for the seller to cover the cost.  If termite repairs are stated in the purchase contract (and they aren't always), lenders will want to see termite clearance in order to make a loan, and if buyers are footing the bill, the lender has to know that amount and approve it before final loan funding. 

Termite damage is most often seen in houses, but condos are not automatically exempt -- especially if there is dampness and/or trees nearby and a way to termite to enter the interior. If your home is near a park or school where grass/landscaping is watered frequently, then those features may draw termites to your property.

If you are considering making a change of residence with your house, condo or residential units, please contact me for more information on selling.  Getting the right price is very important, but also knowing the terms smooths the way for a successful closing!

*Information courtesy of BPG Inspections

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

Homeowners May Be Losing Millions When Selling to "We Buy Houses" Investors

I'm sure you've seen the yellow signs with black handwritten lettering on the corners as you drive by, advertising all cash purchase, fast sale, easy sale, etc.  There are also some TV advertisers along the same lines.

Here is a story about research done in a Philadelphia market where such purchasers approach poor and vulnerable homeowners in areas where owners may not want to approach a real estate agent for various reasons.

A report from a Drexel University Nowalk Metro Finance Lab states sellers are often short-changed when selling the people behind the "We Buy Houses" signs, visible throughout the Philadelphia area. This report found that owners selling to such investors without listing on the multiple listing service (MLS) typically receive less than half the value they would receive if using the traditional method of selling. In that market, a seller received $126,000 less than a similar home on the MLS, an estimated $500 million loss in the Philadelphia market over 4-1/2 years.  This study also states only two cities and four states regulate the wholesale market, which unlike real estate agents, does not require a license to work in.

The investor may approach an owner with a price in mind that accounts for his/her after-resale value minus their capital costs and then quotes a price to the homeowner. If the purchaser is not a contractor himself/herself who will do the work, then that investor may be looking for a connection who is looking to enter that market and sells the contract to them for a profit to the investor.

In Philadelphia these transactions are concentrated in certain areas where the majority of homes never go on the MLS.  The Finance Lab looked into the reasons why these owners would not list with an agent and skip getting a higher price - it had to do with factors involving racial discrimination, economic discrimination, and lack of knowledge and assistance on how to fix up a home for sale in today's HGTV-style market. So a lot of home equity ends of being lost to the owner, and eventually the sale leads to gradual gentrification of neighborhoods by new owners.

Not addressed in this article are the more recent Fair Housing and Fair Appraisal requirements which are now required in Realtor contracts, but which appear to be completely washed over in the Philadelphia areas because investors are typically unlicensed free agents, not regulated except where described above.

There are also licensed groups operating in a similar way in the wider real estate market in many states, including California, with the same aim - to buy low and sell high.  Sellers of these properties often feel they are being saved the hassle of preparation to sell, especially if they are near foreclosure, a short sale, or are low of funds to paint, repair and fix up to sell. But so often it's the same story - they don't realize how much money they're leaving on the table -- and in fact, there are now some loan programs which will analyze the equity and front the money to owners for just that purpose, who can they repay the short term loan out of escrow proceeds -- and still walk away with profit.

If you are wondering about a cost-to-sell, or a value for selling without prior repairs, this is the time to find out, as non-investor buyers are looking for a chance to own.

Please contact me, an experienced Realtor with 28 years experience, for a no-obligation market estimate for your house, condo or multi-unit residential property.

 

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

Housing Inventory/Supply in Southern California - It's a Big Issue

Data as of 2-24-2023 - Market Summary

Housing inventory has been an issue for about 10 years, but one bright spot in the graph shows that, overall, inventory in Los Angeles County has increased to 3.1 months supply as of December, 2022. According to data released by California Association of Realtors, this is an increase of 138%+ compared to 2021 when the houses were being consumed by multiple offers in a matter of days.  It's also an overall increase compared to previous years when inventory was as low as one month in many cities/neighborhoods. But it's still 50% lower than what is considered the traditional time for inventory supply:  which is 6 months, meaning that at the present rate of sale, it would be 6 months before there were no houses left to sell if no new properties came on the market during that time.

The inventory increase shows similar levels for statewide and nationwide, but is still well below the 6 month standard. What is completely obvious is the $200,000+ income required to purchase in Los Angeles County and California as a whole compared to the lower national average of $94,400.

Graph of sellers in Jan and Feb

Steven Thomas, Southern California economist who publishes Reports on Housing, follows the market in his weekly videos on You Tube and Facecook.  In his lastest weekly report, new listings are down 41% in January, and February is down 40%, or a total of 17,000 missing for sale signs in Southern California, with San Diego being the most affected. Note the graph lines showing levels in years since 2015, and where we are now.  One of the major reasons, according to him, for the lack of inventory are the very low interest rates current property owners are enjoying--not giving enough incentive to move.

If you would like to find out about the selling process for your house, condo or 4-unit property, please contact me for vital information about selling, whether yours is an owner-occupied property or investor owned.

#marketvalue #LongBeachrealestate #housinginventory

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

What To Do With All Your Stuff, Whether You're Selling or Not

The Art and Necessity of Decluttering

 

Barcelona Chair - 1929

Did you ever hear of Mies Van Der Rohe?  Perhaps not, unless you have an interest in architecture.  (He also designed the “Barcelona Chair” around 1929 .) Mies Van Der Rohe died in 1969, a German architect who did many works in the U.S., and often aspired to the ideal of “less is more”, a saying about the ideal of creating something so beautiful it cannot be further reduced.

 

Opinions may differ, but there are many people who would say that the type of stuff in the next photo could be reduced – quite a bit.  “Decluttering” is the word most familiar to people.  

Whether you’re moving, or just wanting to move your stuff, decluttering can bring improvements to your daily life, and most probably to your outlook in general.

All you have to do is watch the TV series about hoarders to view the extreme situations.  Most people are not this extreme, but neither were the people in the TV show at one time.  But whether you’re at the low end or the high middle of the distribution curve on junk,  the process can take a lot of work, because that stuff may have meaning to you, or you think it does.

Garage tools piled on top of each other

If you do put your home on the market, having too much stuff in your house or condo can detract from the buyer’s ability to see and focus on the property, and in the end could hurt you financially.

There are people, such as Marie Kondo, who specialize in decluttering, but really most people can tackle this themselves if they keep in mind:

1. There’s a financial advantage in keeping only what you use.

      2.   That breaking down the clean out process into smaller tasks can lighten the load.

3.            3. That selling, donating or sharing are three primary ways to lighten your inventory—sell to consignment shops, Facebook groups, estate sale specialists, or donate to a halfway house, charity groups, neighborhood yard sales.  1-800-GOTJUNK is a resource for taking away stuff that cannot be donated, or, pick a self-storage site for later attention.

Decluttering may also mean a transformational growth process, which can lead to establishing more effective daily routines, simplifying meals and grocery shopping, and quieting the noise in your life.  More resources on simplification are found here.

If cleaning out is a task you would like to leave to a professional, the national hourly rate for a member of the National Association of Professional Organizers , for example, would be between $50 to $100 an hour. It might be worth a consultation to help you get started and actually speed up the process.

The key is, don’t try to downsize in a month. You may give up something you wish you’d kept (but thinking you need everything doesn’t work either).  It’s essential to start developing the habit of reviewing your possessions and think of when the last time was you wore an item of clothing, or used a tool or appliance, or are you keeping items you inherited that may only be taking up space.

Your home should be seen as beautiful in the eye of the beholder. Get started on your plan, your goal is reachable!

Mies Van Der Rohe

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

Long Beach Sales and Listings Trends; County Sales and Listings Trends

Closed Sales Graph for PWR Region

In the region covered by the Pacific West Association of Realtors, extending over south Los Angeles County and Orange County cities, the graph clearly illustrates falling volume of sales. Single family homes closed in January 2022 were at 1,650, while SFRs closed in January 2023 were at 1,091.  Townhouse-condo closings were similar: 849 last year vs. 471 sales in January 2023 -- a drop of almost 50%

But the new listings on market show an improvement over the same geographic area:

Homes for Sale Graph in PWR Region

January 2023 shows an active inventory increase of 12.5% for single family homes, and an increase of 30.6% increase for condominiums-townhouses compared to one year ago.  Neither are as high as 2021, but the upswing shows more owners are moving on to allow more buyers to enter the market.

The Mills Act Program open in Long Beach for First Time Since 2020.

Historic Craftsman home

The Mills Act Property Tax Abatement Program is designed to help owners who have purchased a historic property, or have high tax burden due to transfer or property reassessment.  According to the State's Office of Historic Preservation:

"The Mills Act is the single most important economic incentive program in California for the restoration and preservation of qualified historic buildings by private property owners. The Mills Act Program is administered and implemented by local governments. Mills Act contracts are between the property owner and the local government granting the tax abatement. The Office of Historic Preservation is not a signatory to Mills Act contracts.
 
"Each local government establishes their own criteria and determines how many contracts they will allow in their jurisdiction. For answers to specific questions such as local eligibility criteria, application procedures, and contract terms, contact the city or county official for your jurisdiction."

The City of Long Beach's program for the Mills Act is hosting mandatory workshops in the near future for those interested in applying for this program, on January 28 and February 18: "Although tax savings cannot be guaranteed through entering into a Mills Act contract, estimates can be made through the application process to determine likely potential property tax savings.  The Mills Act is especially beneficial for recent buyers of historic sites, or owners who may have recently had a property transfer or tax reassessment. The program is generally less beneficial for property owners who have owned their property for more than 10 years."

The application package deadline is March 3. Please go to the City's website for more information on this process.  For properties and owners who qualify, there may be significant tax savings. "The incentive is achieved through property tax relief to owners of historic properties in exchange for the rehabilitation and restoration of the historic property pursuant to the terms of a Mills Act contract with the City." The purpose of the Mills Act is to rehabilitate and restore the historic properties, which means it is located in one of the historic districts or is a designated historic building. 

 

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

Starting Out in 2023's Real Estate Market

As of mid December 2022, these are some of the conditions leading into 2023.

The labor market - There are two jobs for every job seeker, which puts pressure on wages, and ultimately creates higher prices for products.

Recession ahead - Most likely, maybe in the 2nd quarter of 2023. Mortgage rates fall typically with a recession, and an increase in demand follows. 

Supply and demand wavered in 2022 - Inventory for single family homes still lower than prior to the beginning of the pandemic, in mid-December 1,000,000 homes were on the market per the National Association of Realtors. 

U.S. Total Inventory of Home on Market

Southern California Counties inventory on market, 3-year average prior to COVID:

Los Angeles  - 9,349 (down 11%)

Orange: 2,939 (down 36%)

Riverside: 6,115  (down 27%)

San Bernardino: 3,471  (down 21%)

Ventura: 851 (down 35%)

The average days on market for Los Angeles, Riverside and San Bernardino Counties were over 100 days.

Median Price and Mortgage Rates in Southern California:

Median Price and Rates

By mid-December, interest rates went to below 6.5%, from a high of over 7 % a couple of months prior. The dark blue line shows the  corresponding increase in monthly payment, and obviously there's been extreme changes in the rates since the beginning of 2022. Buyers are seeing the return of assistance programs in the form of grants (with conditions of course), and more sellers have been willing to do buydowns in rates for the buyers. 

Buydown scenario:

$800,000 Price, 20% down, $640,000 loan amount, 750 FICO score, single family home. The mortgage only payment in Year One is $3,148; Year Two is $3,534, and $3,940 for Year Three and beyond. The seller contribution to buyer to make this happen is $14,400. 

A survey by Lending Tree showed that 41% of Americans think that there will be a housing crash in the next 12 months (from November 2022).  But in the words of Steven Thomas, Orange County Economist:

"The number one reason why a crash will not occur is a lack of available homes to purchase. When the inventory builds, it takes a lot longer to sell. When the unsold inventory rises above 300 days, negotiations lean heavily in favor of buyers and home values fall rapidly. The unsold inventory in Southern California, according to the California Association ofor 2022 in July at 99 days. In comparing today’s unsold inventory to the two years leading up to the Great Recession, 2006 and 2007, the difference is stunning. The unsold inventory peak in 2006 was 219 days, and it was 456 in 2007.   Home prices are not tumbling at the rate they were in 2007-2008 when values sank by 40%."

There is no panic selling and no forced selling in today's market, there are limited homes to sell because homeowners are choosing not to sell. Today's loan delinquency rate is at its lowest level in decades.

If you are thinking of making a change, please contact me for assistance in finding your home's value and how to prepare for a sale.

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

A Slowing of Rate Increases, Finally?

The sequence of four straight hikes of 75 basis points (.75%) in a row was capped last Wednesday Dec 14 by a rate hike of 50 basis points (.5%), all in an effort to cap inflation.  Federal Reserve Chair Jerome Powell recognize the stress of these rate hikes, and continues to promise to be vigilant in fighting inflation, but it perhaps has been having the opposite effect.

"Indeed, the statement released by the FOMC pointed to “ongoing increases in the target range” in order to bring inflation back to the Fed’s 2% target. New economic projections issued Wednesday by the central bank revealed that officials now anticipate inflation to close this year at 4.8%, gradually dwindling back to 3.5% in 2023 and falling to 2.5% in 2024."  The Fed's policy rate is now at 4.5%, the highest since 2007.  https://www.scotsmanguide.com/browse/content/fed-finally-backs-off-of-75basispoint-hikes-with-december-rate-increase

However, the federal funds rate and mortgage rates sometimes move in opposite directions, such as in early December when mortgage rates fell in response to declining inflation.  "Although there's merely an indirect link between mortgage rates and the federal funds rate, the Fed does have a direct influence on the rates charged on home equity lines of credit, which typically have adjustable rates." https://www.nerdwallet.com/article/mortgages/fed-mortgage-rates

California Association of Realtors, in its October prediction for 2023, was somewhat stark in its prediction of the market and the economic factors affecting housing for 2023:

Inflation will not return to pre-pandemic levels until 2024; interest rates will surge again; home sales will dip as costs of borrowing rise; housing affordability will be in the headwinds in 2023, but home prices will not fall as they did in 2009 era.
 

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

Long Beach Housing Market Profile for November 2022

Amazingly, the median and average single family prices are up over the rolling calculation 12 month period by 7% and 11%, respectively. Comparing November to November, however, the median price is down almost 4%, but the average sales price is up over 3%!  Yes, the year has been somewhat fractured, what with interest rates down, then up, then softening again most recently.

Although it may vary in individual neighborhoods and price points, the original list to sale price on a rolling 12 month basis was over 100% -- still!  But then comparing November to November, that figure shows sales prices were down almost 4% for the City as a whole.  

November Housing Stats for Long Beach CA

The picture for condominiums is similar, the 12 month rolling calcuation is up over 9%, the November to November comparison is down for median prices, still up slightly for the average condo price.

Long Beach condo pricing - November

 

 

 

 

 

 

 

 

 

Best wishes for a beautiful end of 2022 holiday celebration!

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

Electrification Costs to Consumers to Reduce GHG Emissions

Greenhouse effect around Earth

A law signed in 2018, AB3232, mandates a 40% reduction in greenhouse gas emission by 40% by 2045. Greenhouse gas emissions (GHG) from buildings account for about 25% of California's total emissions. 

Building emissions stem from direct and indirect sources:
Direct emissions come from
• Combustion of fuels for heating and cooking
(gas stoves, gas heaters).
• Gas leaks (gas lines in buildings, unlit pilot lights).
• Hydrofluorocarbon (HFC) leaks (from refrigerators and other compressor-based systems for space conditioning and water heating, during use and disposal).* Indirect emissions come from generation of the electricity used in buildings. 

According to the California Building Decarbonization Assessment, Californians can reduce emissions by:

    "Expanding use of efficient electric heat pumps.
        • Investing in weatherization and electrification of existing buildings.
        • Reducing refrigerant leakage.
        • Planning for and promoting substitutes for natural gas in existing buildings, primarily electricity; considering renewable gases where available at reasonable cost."

There are 7 ways to decarbonize a building as outlined under this program through the California Energy Commission:

1. Replace gas-fueled appliances with efficient electric alternatives.
2. Continue decarbonizing electricity by growing the low-carbon share of the generation portfolio.
3. Foster energy efficiency through incentive programs, appliance standards, building standards, research, and financing.
4. Transition to using better refrigerants and reduce associated leakage
5. Grow distributed energy resources such as rooftop solar photovoltaic (PV) and onsite battery storage.
6. Decarbonize the gas system by displacing natural gas with renewable gas produced from carbon-free electricity or existing waste streams.
7. Give building owners and occupants incentives to shift their electricity use in response to the timing of energy costs, GHG emissions intensity, or electricity grid emergencies.

So what can consumers do?  Californians should start looking now at what will be an additional investment in their homes. Millions of single family homes (which are almost 90% of owner-occupied housing) were not built to be electrified, and will need substantial changes including solar panels, amp volt changes, new appliances, and professional installation.   And this will come at a cost in order to retrofit single-family homes and units in multi-family structures.  

Cost per housing unit for a pre-1978 home retrofit is estimated as follows:

San Francisco        $34,790 

San Jose                 $36,500

Sacramento            $29,000

Los Angeles           $34,000

This Residential Building Electrification in California study outlines in explicit and lengthy detail the aspects of appliances, water heaters, refrigerators, utility gas and heating features of home which will need to be changed out in time.

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