What Are You Willing to Give Up to Buy Your First Home?

A survey of just over 1,000 Americans, conducted by Cinch Home Services, a home warranty firm, shows

what some people are willing to do in order to afford a home purchase.  Homes are expensive, more than ever especially in California where the median price is now over $800,000, yet owning a home is still viewed as most important, especially in the younger generation. And what are they most willing to give up?  Alcohol.  

In viewing the survey results, it becomes obvious that saving money could impact various industries:  California wine industry, the travel industry, clothing companies, restaurants, candy manufacturers of chocolate--it goes on and on.  Not only is this survey about home buying, it could also be seen as an indirect comment of how housing affects the overall economy, as well as being an overall picture of how many young adults spend their income.  Is alcohol such a big give up? It can be if going out to dinner with drinks is a  consistently main feature of leisure entertainment.  And some other choices don't really seem tied with saving money--but saving 30% of your salary might really add up for a prospective buyer if that dollar savings is significant enough for their chosen market price. Maybe not seeing your family as often means you're spending more time working overtime--that too might help economically as long as it doesn't infringe on family ties too much.  But getting only 3 hours of sleep every night is not going to lead to a more productive workday for the average human being who needs 7-8 hours of sleep. So some of these choices are not productive, in my view.  But some are, and young adults should review their monthly budgets to see where they can save money and cut back on debt (not specifically mentioned here).  Cutting back on debt improves credit scores, which greatly assists in getting a mortgage loan, and also produces a greater sense of well being, which is important in working towards the goal of homeownership!!

For more information on home buying or selling, please contact me.  I've had 25 years of experience helping buyers and sellers with their residential properties.

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

What is SB 9, Signed into law by Gov. Gavin Newsom on Sept. 17, 2021

A while back California passed a law allowing accessory dwelling units (ADUs) throughout the state as part of the work to alleviate a housing shortage.  There is now Senate Bill 9, the California Housing Opportunity and More Efficiency (HOME) Act, a law that will allow--disregarding neighborhood zoning--owners of single family homes to split their lots and build a duplex, effective January, 2022.

"The HOME Act facilitates the process for homeowners to build a duplex or split their current residential lot, expanding housing options for people of all incomes that will create more opportunities for homeowners to add units on their existing properties. It includes provisions to prevent the displacement of existing renters and protect historic districts, fire-prone areas and environmental quality."

Many have been concerned about the forced change to single family zoning, and potential negative results to neighborhoods.  According to The Terner Center in their July report on SB 9, "This ability to create duplexes and/or split the lot and convey new units with a distinct title would allow property owners to  pursue a wider range of financing options than are available for ADU construction to build these new homes." ....  "While Senate Bill 9 does not apply to single-family parcels in historic districts, fire hazard zones, and rural areas, local market prices and development costs play a large role in determining where there is financial viability for the addition of new homes. Moreover, physical constraints, such as small lot sizes and other local regulations, can limit the number of new homes built as a result of this bill."  Parcels most likely to benefit from this new law are those that are already "financially feasible" under existing law, and that relatively few single family parcels are expected to be financially feasible for added units as a result of this bill.  Mortgage products may be accelerated somewhat for parcels that are newly subdivided, for households able to take advantage of new homes of newly divided parcels.

As reported by The Terner Center, restrictions, which may put feasible properties statewide to about 410,000, of which about 110,000 would become newly feasible, include: 

1 Cannot be in a historic district or a historically designated property.

2 Lot split cannot be smaller than 40 percent of the original parcel.

3 A locality cannot impose any standards that would preclude the construction of up to two units or physically precluding either of the two units from being at least 800 square feet in floor area.

4 Side and rear setbacks of up to 4 feet is allowed.

5 The lot split cannot require the demolition or alteration of a housing unit currently serving moderate-, low- or very-low income household(s) or a rent-controlled unit.

6 The lot split cannot result in the demolition or alteration of housing that has been occupied by a tenant in the last three years or where an owner has used the Ellis Act to remove a rental unit from the market within the last 15 years. 

7 A jurisdiction may impose an owner-occupancy restriction for lot splits, where the applicant must intend to occupy one of the housing units as their principal residence for a minimum of one year from the date of the approval of the urban lot split.

8 No lot splits on adjacent lots. 

9 Cannot be created from a previous lot split. 

In Long Beach, the impact may be lessened because lot sizes are relatively small, which would preclude much of this from happening.  Officials say in order to make financial sense, lot sizes would have to be about 8,000 square feet.  Of the 59,803 single family lots in Long Beach, 4,609 are over 8,000 square feet.

 

For the complete report from The Terner Center, see their July 2021 report here.   

State law:  https://www.gov.ca.gov/2021/09/16/governor-newsom-signs-historic-legislation-to-boost-californias-housing-supply-and-fight-the-housing-crisis/

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

Rent Growth is Surging

Rents increase in 93% of metro areas

The national multifamily is surging ahead this year in many markets, over 10% to $1539 monthly rent nationwide.  August, according to Yardi Matrix's August report, showed year over year rent growth in 30 markets:  Phoenix leading at 22 percent, Tampa, Las Vegas, San Francisco at 1.4%.  

In August, seven gateway markets surpassed pre-pandamic levels, from March 2020:   Miami (16.2 percent), Boston (7.0 percent), Chicago (6.4 percent), Los Angeles (4.9 percent) and Washington, D.C. (3.9 percent).  The ApartmentList.com graphic, from an April presentation, shows increases in metro areas.

On a month-over-month basis from July 2021, Las Vegas, at 3.3 percent, with the Inland Empire and Seattle, at 3.1 percent, registered the largest increases.

Single family rentals, however, outpaces multifamily in the top 30 metro areas, especially in Florida and Texas metro areas. 

Long Beach

Locally, what are rents for residential properties?  For brand new housing, Holland Partners has recently opened Volta at 635 Pine where rents start at $2175 for a 1st floor studio under 500 sq. ft., on up to $4590 for a townhome style unit--there are 11 units in this project designated for affordable housing.  

Long Beach is a mix of neighborhoods and property styles, so if the apartment searcher opts for a wider variety, the REALTOR MLS reflects a range of different properties on the market for rent or lease, starting at $1395/month for a 500 sq.ft. unit on Pine Ave (downtown) to $15,000 for a house on Naples Island.   Average rent for units in a 4-plex or other apartment style unit is $2100/month; average rent for condominiums is $3000/month; average for a single family is $3477/month (excluding the outlier house for $15,000).  

Alternately, rents in Huntington Beach start at $1800 for 593 sq. ft. condo; Lakewood currently has 4 listings for tent (in the MLS), starting at $3000; Cerritos starts at $2195.  While the renter may find more listings on other internet sites, these prices will probably be very indicative of what is listed elsewhere.

There are many economic factors relating to the higher rents, but one major factor stands out, that consumers who did not lose their jobs during the 2020 pandemic months are still economically strong, while other workers in the food industry and retail were more affected, unfortunately, and will take longer to gain strength in the housing market.  The numbers of individuals who have returned to family homes is a topic for another day, but is also part of the renter picture.

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