CALIFORNIA ASSOCIATION OF REALTORS Market Forecast for 2025

Summary of Yearly Housing Sale Data

The annual report by the REALTOR trade group was publicly reviewed last Wednesday at the Long Beach meeting at the Convention Center by CAR economist Jordan Levine.

What do people want to know first? How much more will houses cost next year.

Here are 3 main points from the CAR economist report for 2025:

• Existing, single-family home sales are forecast to total 304,400 units in 2025, an increase of 10.5 percent from 2024’s projected pace of 275,400.
  
  
• California’s median home price is forecast to climb 4.6 percent to $909,400 in 2025, following a projected 6.8 percent increase to $869,500 in 2024 from 2023’s $814,000.
  
  
• Housing affordability* is expected to remain stable at 16 percent next year after slipping to a projected 16 percent in 2024 from 17 percent in 2023.

There's much more to this 2025 annual report, which can be shared on request.

If you would like to discuss your home value, please feel free to contact me for conversation.  Or, try out this automated home valuation program which will also send you email updates

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

How Can Two Appraisers Value the Same Property Differently?

House with pool

 A situation to avoid in any market is ending up with a contract price that the appraiser doesn't agree with. Sometimes sellers are willing to lower their selling price, or buyers raise their contract price, or adjust their loan level if possible to meet the new selling criteria.  Sometimes an appraiser is willing to make an adjustment (not very common), or the lender order a new appraisal which is probably going to be an additional expense to the buyer. This is why it's so important to find the right list price and selling price when putting your property on the market--sometimes though, there's just no predicting even when you thought you chose justifiable comparables.  Read the article below about how these disparities can come about.

 How Can Two Appraisers Value the Same Property Differently?: One of the most frustrating things for consumers, agents, and even appraisers involved in a real estate transaction is seeing disparate results in two or more appraisals of a property. A variety of factors—including timing, purpose of the valuation and comparable sales used—can lead to disparities.

Residential Market Prices in Long Beach, August 2024 - Plus Purchasing Power Calculator

 

Residential Market Prices for City of Long Beach

Condo Median:  $526,000 |  Condo Average: $566,963

Single Family House Median: $1,072,500 | SFR Average:  $1,160,406

Downtown Long Beach - 90802

Single Family Median:  $830,000 |  SFR Average: $830,000

Condo Median:  $514,500 |  Condo Average: $575,804

North Long Beach - 90805 

Single Family Median:  $705,000 | SFR Average: $673,875

Condo Median:  $547,400 | Condo Average: $547,400

East Long Beach - 90808

Single Family Median:  $1,116,000 | SFR Average: $1,111,824

Condo Sales:  None

East Long Beach - 90815

Single Family Median:  $1,178,000 | SFR Average: $1,267,962

Condo Median: $547,500   | Condo Average:  $591,000

City of Lakewood

Single Family House Median: $871,000 | SFR Average:  $934,629

Condo Median:  $770,000 |  Condo Average: $770,000

City of Signal Hill

Single Family House Median: $1,050,000 | SFR Average:  $1,050,000

Condo Median:  $625,500 |  Condo Average: $650,833

 

Long Beach Months of Inventory is 2.8 months, an increase from 2.3 months this time last year.

The industry standard for months of inventory is as follows, which shows we are in a seller's market in Long Beach and most other surrounding areas, even though we've seen an increase in listings recently:

Seller’s Market: <= 5.5 months
Balanced Market: >=5.6 and <=6.5 months
Buyer’s Market: >=6.6 months

If I can give you more specific information about your local neighborhood, please contact me.  The above figures are by no means all local information.  

To see how interest rates are impacting purchasing power, both buyers and sellers should find this public interactive tool very helpful:  https://www.car.org/marketdata/interactive/interestrateaffordability

 

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

Mold and Mildew -- Don't Let Them Set Up Camp in Your Home

 Mold and mildew can be intrusive; they let themselves in without knocking, then set up camp in damp corners,  including subflooring areas under your home due to a pipe leak that you may not be aware of until you hire an inspector.

Mold and mildew are two distinct fungi that commonly invade our homes, thriving in wet and humid conditions. While they may look similar to the untrained eye, each has unique characteristics and requires different treatment and prevention. This article delves into the subtle yet significant differences between mold and mildew so you'll know how to identify, remove, and ultimately rule out these unwelcome guests.

 

 The Difference Between Mildew and Mold

Understanding the differences between mildew and mold can help prevent further spread across your home.

 Here's a quick reference guide:

  Mold is typically fuzzy or velvety and can appear in various colors, like green, black, or brown patches. It thrives in damp environments and can cause a musty odor.

  Mildew is usually white or gray and has a powdery texture. Mildew grows on hard surfaces, especially in high-moisture areas like bathrooms.

  Something they both have in common? Potentially causing health issues if not addressed.

Balcony Inspection Required for 3+ Multifamily Units in California

Chalet with wood balcony

In 2015 there was a disastrous collapse of a balcony in Berkeley where a number of students attending a party were injured and six died. This was not an "old" building, but it was one where there was moisture intrusion into the wood framing, resulting in dry rot. 

 As a result of this, the following inspections bills came about.

There were two bills passed in 2018 and 2019 concerning balcony inspections where the structure is supported with wood or wood-based material.

The bill passed in 2018, SB 721, concerns properties with 3 or more multifamily units (not condominiums or other HOA property) that have a balcony, elevated walkway or staircase. 

Do you have a house with two units in the rear with balcony or stair case made of wood? These are not uncommon in many residential neighborhoods, and fall under the requirements of SB 721. 

What is required to be inspected is an “Exterior Elevated Element” (EEE), which is defined as balconies, decks, porches, stairways, walkways, and entry structures that extend beyond exterior walls of the building, which has a walking surface that is elevated more than six feet above ground level and is designed for human occupancy or use.

The due date for this inspection of balconies, elevated walkways and staircases is January 1, 2025.  The inspection must be performed by a licensed contractor with an "A", "B" or "C-5" license with at least 5 years experience, or a certified building inspection.  NOTE:  10-11-2024 - THE DEADLINE IS NOW EXTENDED TO JANUARY 1, 2026.

Inspections on apartment buildings must take place every six years.

Obviously, time is running out so if you fall into this category of ownership of 3+ multifamily units, you should take action as soon as possible.  What is the cost?  It varies according to the number of units, but one local company recently stated that their charge is $1200 for properties of 3-10 units. 

Another issue owners should think about are possible requirements of proof of inspection and completion of any repairs by the owner's insurance company, which may require submission of the report.

For more information, here is a link to SB 721 as passed by the Legislature. 

For more information on the 2015 balcony collapse see this Wikipedia article.

If you are interested in obtaining the name of a company to perform this inspection, please contact me.

If you are interested in a valuation of your property because you need it for insurance purposes, or you are thinking of selling it, please contact me.

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

What Colors for Your Kitchen?

Colors to Fit Your Kitchen’s Orientation

Kitchen view with sunny orientation

 

Which direction does the kitchen face: north, south, east or west? 

A design expert says there’s the perfect color for each orientation.

Forty-one percent of homeowners regret their color choice for the kitchen, according to a survey from Moneywise.(link is external) They may not have factored in the direction of the kitchen and whether it’s north-, south-, east- or west-facing, says Jen Nash, head of design at Magnet Kitchens(link is external). She believes the orientation of the kitchen is a big factor in choosing the “right” color for your space.

Source: Magnet Kitchens

                                                     

North-Facing Kitchens: Warm Neutrals

“North-facing kitchens tend to lack sunlight, especially in comparison to south-facing kitchens,” Nash says. “A lack of sunlight can, in some cases, leave the kitchen space feeling a little dark and cold and also can make the kitchen look smaller than it actually is.”

She recommends warmer shades of a lighter color—like yellows and creams—for north-facing spaces. “The use of warmer, light colors will make the space appear more welcoming and inviting while also making the space look larger,” Nash says.

South-Facing Kitchens: Experimental

South-facing kitchens tend to get plenty of sunlight and natural light flowing in during the day. As such, color options are more plentiful, Nash says.

“Pale, soft tones work extremely well in south-facing kitchens, as they make the space look extremely airy and spacious,” she says. She also recommends considering whites and pastel colors, such as pale yellows and blues. South-facing kitchens also allow for some experimentation with darker colors: accenting a kitchen with dark greens or blues can add a sense of depth and warmth, Nash says.  

“While it may be tempting to use dark shades as a primary color in your South-facing kitchen, they are extremely bold and, if used excessively, can completely overwhelm a space regardless of the amount of natural light available,” she says. “With this in mind, when using a dark color, be sure to use it in moderation.” 

East-Facing Kitchen: Light Tones

East-facing kitchens tend to receive plenty of natural light in the morning, but as the day goes on, the kitchen space can become dark. Nash recommends opting for colors that will maintain a level of brightness throughout the day but also help balance the intensity of sunlight, particularly in the morning.

Soft shades of tans and beiges can “work extremely well in east-facing kitchens, as they create a warm ambience and work well with changing light throughout the day,” she says. Nash also recommends experimenting with light shades of green, blue and possibly even purple. “Such color choices complement the natural morning light and also help to maintain a bright, airy aesthetic throughout the day as the natural light disappears,” she says.

West-Facing Kitchen: Color Balance

West-facing kitchens tend to receive more natural light in the early evening as the sun begins to set, which can offer up a warm golden tone of lighting within the kitchen space.

“When choosing a color to complement this tone of lighting, you want to make sure you don’t overwhelm the space and opt for a shade that is too warm,” Nash says.

She recommends white or a cool-toned gray for west-facing kitchens. “Cool tones, like white and light gray, can balance out the warmth of the ‘golden hour’ lighting and create a very welcoming, cozy atmosphere without completely overwhelming the space,” she says.

 "Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission."

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

Home Sellers: Here's What the NAR Settlement Means for You

REALTOR Logo

The National Association of REALTORS has published the following on its website concerning what the NAR settlement means for all home sellers.  It is also fully expected that California will sign into law in 2025 that all licensed agents (not just REALTORS) will be required to form written agreements with their buyers before viewing properties with them, physically or online.  Note that August 17 is the practice change date for  all REALTORS nationally:
 

What Does the NAR Settlement Mean for Homebuyers Starting August 17th?

REALTOR logo

The National Association of REALTORS has published the following on its website concerning what the NAR settlement means for all homebuyers.  In addition, it is fully expected that California will sign into law in 2025 that all licensed agents (not just REALTORS) will be required to form written agreements with their buyers.  Note that August 17 is the practice change date for  all REALTORS nationally.

                                                                                                   

Buying a home is one of the largest financial transactions most people will ever undertake. Agents who are REALTORS® are a trusted source of advice and stand ready to help you navigate your homebuying journey and make the choices that work best for you. NAR’s recent settlement has led to several changes that benefit homebuyers, and we wanted to clearly lay them out for you.

Here is what the settlement means for homebuyers:

• You will sign a written agreement with your agent before touring a home.
• Before signing this agreement, you should ensure it reflects the terms you have negotiated with your agent and that you understand exactly what services and value will be provided, and for how much.
• The buyer agreement must include four components concerning compensation:

1. A specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined.
2. Compensation that is objective (e.g., $0, X flat fee, X percent, X hourly rate)—and not open-ended (e.g., cannot be “buyer broker compensation shall be whatever the amount the seller is offering to the buyer”).
3. A term that prohibits the agent from receiving compensation for brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and,
4. A conspicuous statement that broker fees and commissions are fully negotiable and not set by law.

• Written agreements apply to both in-person and live virtual home tours.
• You do not need a written agreement if you are just speaking to an agent at an open house or asking them about their services.
• The seller may agree to offer compensation to your agent. This practice is permitted but the offer cannot be shared on a Multiple Listing Service (MLS)— MLSs are local marketplaces used by both buyer brokers and listing brokers to share information about properties for sale.
• You can still accept concessions from the seller, such as offers to pay your closing costs.

These practice changes will go into effect August 17.

Here is what the settlement doesn’t change:

• Agents who are REALTORS® are here to help you navigate the homebuying process and are ethically obligated to work in your best interest.
• Compensation for your agent remains fully negotiable, and if your agent is a REALTOR®, they must abide by the REALTOR® Code of Ethics and have clear and transparent discussions with you about compensation. When finding an agent to work with, ask questions about compensation and understand what services you are receiving.
• You have choices. Work with your agent to understand the full range of these choices when buying a home, which will help you make the best possible decision for your needs.

If you are an unrepresented buyer and would like to discuss working with an agent or find out more information about a buyer broker agreement, please feel free to contact me without obligation.

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

Cash Buying Trends in 2024- Why Fewer Homes Are on Market

By 2010, the Great Financial Crisis had played its course long enough for lawmakers to pass the Dodd-Frank Act. Following the first major housing crash since the Great Depression and poor economic conditions, the act paved the way for recovering the financial market by strengthening regulations and oversight. Dodd-Frank was the key to preventing the same meltdown from ever happening again while creating another issue: The Supply Crisis. 

As a result of Dodd-Frank, fewer homes were placed on the market. Without high-risk adjustable mortgages, people could use their homes as a secure and unfailing hedge against inflation. Most buyers had excellent credit and great jobs and opted for fixed-rate mortgages. Since there were far fewer foreclosures and short sales, the United States national housing inventory slowly tumbled to record lows.

In response to COVID-19, mortgage rates dropped to historic lows, causing people to take advantage of a once-in-a-lifetime opportunity. For example, if a buyer desired a $5,000 payment (principal and interest) in November 2020 when the 30-year fixed rate was 3%, they were looking at a home priced just shy of $1.5 million. With today’s stubbornly high mortgage rate environment, currently hovering near 7%, that same buyer can only afford a home at $940,000. The difference of $542,500 between the two mortgage rates is enough to stop many would-be buyers from purchasing.

In a typical market, most home purchases are primarily made utilizing a mortgage, with a smaller percentage of buyers paying in cash. We can even see this in the auto industry, with financing (mortgage) and leasing (renting) being the two most popular ways to acquire a car. However, fewer people have sufficient funds to purchase a car, let alone a home.

From 2022 on, we’ve seen a swan dive of a decrease in existing home sales in the United States. With limited inventory and demand due to high mortgage rates, fewer transactions can take place. As a result, smaller factors and changes become more evident to the naked eye. One will even notice how mortgage rate fluctuations dictate where supply and demand can move in the future.

As affordability deteriorates over time, fewer people can afford a mortgage, explaining why there are fewer home purchases. While taking a closer look, one will notice that cash transactions have not changed much over time, yet have become a much larger percentage of all transactions. With not as much movement in the market, cash transactions are viewed in a larger scope, causing many to think the entire market has shifted towards cash.

Thankfully, high mortgage rates are not here forever. Eventually, there will be a gradual relief in the federal funds rate, causing mortgage rates to fall, as well as rates tied to cars, credit, or any consumer loans. With enough relief, expect to see a shift in the housing market. As soon as mortgage rates dip into the 5's, even 5.99%, a new market will emerge, a tidal wave of movement. More transactions mean that cash buyers will be a smaller percentage of the purchasing pool.

In May of this year, 24.5% of all closed sales in Southern California (Los Angeles, Orange, Riverside, San
Bernardino, and San Diego) were cash transactions, approaching a quarter of the entire market. The cash purchased homes represented 3,530 out of a total of 14,381. In a normal pre-covid average (2017-2019) market, for May, there would typically be just over 19,000 home sales. That difference is 4,797 homes or 33% extra home sales. If the same amount of cash homes were bought with the pre-covid May average (2017-2019) for existing home sales, 18% of all closed homes would have been closed in cash, which tells an entirely different story. Unfortunately, many have created a negative narrative around the inability to purchase today due to the competition of so much cash in the market.

PERCENTAGE OF CASH CLOSED SALES BY COUNTY : JANUARY - MAY

It is crucial to understand that today’s market is not permanent and is subject to change. When that will happen is entirely unknown.

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

Article by Brennan Thomas

Rules About Broker Compensation Are Changing -- Everywhere

Broker compensation is not going away, but it will be handled in a different way than has been the previous long-established practice.  

As of August 13, 2024, revised California REALTOR forms for residential real estate are going into effect, as well as the way listings are entered into CRMLS.  These changes are the result of a nationwide settlement entered into between the National Association of REALTORS and the Department of Justice as the result to lawsuits which were filed in other states.  "To remain compliant with the settlement, CRMLS must remove all compensation fields from the MLS. Compensation negotiations will not be allowed in the MLS in any way, shape or form." - CRMLS.   Because compensation is being removed from the MLS, it is handled separately in one of the following ways, or a combination thereof:

     a) when the buyer includes a term in the offer stating the Seller will pay the Buyer Broker fee. Assuming the seller agrees, the Buyer Broker fee becomes part of the complete purchase agreement. Additionally, if using the C.A.R. Residential Purchase Agreement and Joint Escrow Instructions (RPA), the payment would also become part of the Escrow instructions.

    b) when the buyer directly compensates the buyer agent, i.e., per terms in the C.A.R. buyer/broker agreement required to be in place prior to an agent showing property to a buyer, a requirement as of August 13, 2024.

    c) or compensation from the listing agent (not made through the MLS).

This is not a practice change only in California, it is nationwide for all REALTORS that entered into the settlement, which is more than one million National Association of REALTORS members, MLS members and other qualifying brokers.

REALTORS in California have always used a listing contract which explained how compensation occurred, and will continue to do so. A seller should expect to get a clear understanding as well under the new practices when they are contemplating selling their property and going over a listing contract. 

The same holds for buyers who are now required to enter into an agreement with their brokers -- additionally, it's anticipated that this will become a California state law in 2025.

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