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

5 Criteria For Pricing A Home (Plus More)

When you put your home up for sale, one of the best ways to determine the asking price is to look at comparable sales. Unless your home is in a tract where few house modifications have been made, there’s rarely a perfect apples-to-apples comparison, so a pricing decision often relies on comparisons to several recent sales in the area. Here are five criteria to look for in a sales comparison.

1. Location: Homes in the same neighborhood typically follow the same market trends. Comparing your home to another in the same neighborhood is a good start, but comparing it to homes on the same street or block is even better. Appraisers usually use distance, i.e., up to one mile, as one of the selection bases for comparable homes, however a very similar home on your block will be included for value consideration over a very similar home a half-mile away.
   

2. Date of sale: It varies by location, but housing markets can see a ton of fluctuation in a short time period. It‘s best to use the most recent sales data available. Depending on other factors, home sales from the previous 6 months, and if there are many, the previous 30-90 days, will be selected for comparison.
   

3. Home build: Look for homes with similar architectural styles, numbers of bathrooms and bedrooms, square footage, and other basics. If your home is in a 1920s Spanish bungalow historic district, it's not likely that a 1962 contemporary style home will be selected even if it is not far away.  And, a condo is rarely ever considered a comparable for a single family home.
   

4. Features and upgrades: Remodeled bathrooms and kitchens can raise a home’s price, and so can less flashy upgrades like a new roof or HVAC system. Be sure to look for similar bells and whistles. However, a remodeled kitchen does not automatically raise the price of a house using the cost of the remodel.  Since remodeled kitchens and bathrooms are more common in the market, they will be a more standard basis for comparison. 
   

5. Sale types: Homes that are sold as short sales or foreclosures are often in distress or sold at a lower price than they’d receive from a more typical sale. These homes are not as useful for comparisons.  Some lenders when requesting an appraisal will not want to use a distressed property as a comparison for a standard sale, however, if a distressed sale property otherwise compares to your home, and it sold for market value, it may be accepted in the appraisal.

Other factors such as square footage:  Unless it is a very down market with very few sales and the appraiser must make adjustment calculations, a 2000 square foot house that is 4 bedrooms will not ordinarily be used as a comparison for a 900 square foot home with 2 bedrooms--it would simply fall outside the usual comparison parameters.  In that case, an appraiser is more likely to widen the search area to find a more similar property in a similar area.

An appraisal is an opinion of value by the appraiser, and sometimes one of the parties disagrees with it, in which case a buyer may request another one by a different appraiser (and probably have to pay the price for it as well).  Listing agents will usually meet the appraiser at the property and hand them comparables they believe justify the contract price.  When I've done this, most appraisers will review those properties especially when the agent is extremely familiar with the nearby sales.

Getting the right list and sell price is important for a smooth transaction, and these are the more common issues agents need to take into consideration when presenting market information so that a seller gets the proper perspective on pricing their home.

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

What is the Difference between Home Warranty and Home Insurance?

When purchasing a new home, it’s important to do in-depth research on all facets of the homebuying process. One thing you’ll need to understand is how to best protect yourself and your investment if anything were to go wrong. Check out the information on home insurance versus home warranty below to educate yourself on your options.

Home Insurance

Homeowners insurance pays for any accidental damages and loss that are caused by fire, lightning strikes, windstorms, and hail, however, damage from earthquakes and floods is typically not covered. It also covers the replacement of personal property in case of theft or damage and liability if a person were to get injured in your home or on your property. According to American Home Shield, the average annual cost of a homeowner's insurance policy ranges between $300 and $1,000, and the bank usually asks you to obtain a policy before the mortgage is issued. Make sure to keep in mind that each type of coverage in the policy is subject to a limit and, in most cases, you will have to pay a deductible. Another consideration is whether you are purchasing a single family home, or a property such as a condo situated inside a homeowner association which also carries a master common area policy.  Be sure to find out about the coverages available.

Home Warranty

A home warranty is designed to cover the cost of repairs and replacements of larger appliances and crucial systems in your home that may fail or break due to age and wear and tear. This includes but isn’t limited to HVAC, electrical, or plumbing components, kitchen appliances, and your washer and dryer. With a home warranty, you are required to pay premiums year-round, even if you do not use it, and it won’t cover damages if appliances were not maintained properly or if the damage is from a fire or other disaster.  Some home warranty policy coverages may be quite extensive, so if you are covered through one when you close escrow, be sure to review what's included before calling a repair person, because savings may be considerable if you have coverage. The upfront home waranty fee for a repair call is usually much less than paying a full cost repair man or plumber.  Although not required, often a seller is willing to pay such a home warranty premium for one year, through escrow for the buyer.

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