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