Owner/Tenant Updates for California in 2024

Roommates moving in to new unit

The following is meant as a summary, not an in depth explanation of current updates (provided courtesy of California Association of REALTORS), to the Tenant Protection Act.  A real estate attorney or property manager, if you have one, should be consulted if you have questions about your particular situation.  It's really advisable to do so anyway, since in California tenant/owner laws are sometimes complex, and vary from county to county, and city to city:

    

     Beginning July 1, 2024,landlords may collect no more than one month’s rent for either furnished or unfurnished units in addition to first month’s rent. There is an exception for small landlords, defined as a landlord who is a natural person or LLC and owns no more than two residential rental properties with no more than a total of four units offered for rent. 

     Tenant Protection Act law tightens up the requirements for a landlord to terminate a tenancy under the Tenant Protection Act (i.e., California statewide rent cap and just cause eviction law) for no-fault evictions based upon owner move-in or substantial remodeling.  Additionally, an owner who violates the TPA by improperly terminating a tenancy or by raising rent beyond the maximum amount is liable for actual damages, reasonable attorney’s fees and costs (at the discretion of the judge), up to three times actual damages for willful violations and punitive damages. The Attorney General et al is authorized to seek injunctive relief. Effective April 1, 2024. 

    Prohibits local ordinances that penalize tenants and landlords for various types of law enforcement contacts, i.e., local “crime free” rental housing programs and ordinances. 

    Landlord must offer “ability to pay” in lieu of reliance on credit history and reports in assessing a tenant’s rental application when prospective tenant is receiving a government rent subsidy such as a Section 8 rental voucher.

    Allows a jurisdiction with local rent control to require an owner of a rent-controlled unit to allow a tenant with a permanent physical disability to relocate to an available comparable or smaller unit located on an accessible floor of the property and retain their same rental rate. 

     SB 712 prohibits a landlord from prohibiting a tenant from owning personal micromobility devices or from storing and recharging up to one personal micromobility (e.g., e-bike) device in their dwelling unit for each person occupying the unit, subject to certain conditions and exceptions.   

    This law tightens up the requirements for a landlord to terminate a tenancy under the Tenant Protection Act (i.e., California statewide rent cap and just cause eviction law) for no-fault evictions based upon owner move-in or substantial remodeling.  Additionally, an owner who violates the TPA by improperly terminating a tenancy or by raising rent beyond the maximum amount is liable for actual damages, reasonable attorney’s fees and costs (at the discretion of the judge), up to three times actual damages for willful violations and punitive damages. The Attorney General et al is authorized to seek injunctive relief. Effective April 1, 2024. 

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

What Happened in 2023 in the California Real Estate Scene

Graphic showing 2023 market data in California

 The 2023 housing market had ups and downs, but buyer competition remained, and prices continued upward for the most part, in spite of inflation, shrinking insurance availability, and increased mortgage interest rates.

Home sales slowed, but the housing market hasn't crashed. Mortgage rates went to 7 percent, prompting many homeowners to not sell, and those who did were sometimes offering incentives to the buyers.  Housing shortages are reflected in the December to December 23% decrease in new listings, and the overall 20% decrease in closed sales.  But median and average sale prices both increased.

For 2024, the chief economist of the California Association of Realtors, Jordan Levine, predicts continued price improvement, and sales volume improvement compared to 2023. Mortgage rates are already easing, which lowers the monthly mortgage payment amount, and perhaps will fall to the 6-6.5% range. To combat the inventory shortage, expect widening support  for accessory dwelling nits and the conversion of empty office buildings into residential space. Insurance carriers may continue to withdraw, and cause an increase in prices while forcing the buyers to look at outside carriers.  The California Fair Plan is a growing option, but comes at a higher cost for only basic coverage.  Buyers should do their  best to find as many insurance carrier options as possible.  A new down payment assistance resource directory may offer help for some buyers, contact me for a program that may work for you.

You're probably aware of ChatGPT generated information, and the discussions about using Artificial  Intelligence (it's not new, a Magnum P.I. segment in the 1980s had Magnum and his consultant friend talking about and referring to artificial intelligence and what they were discovering then what computers could do!) are now frequent in the real estate profession. Some property descriptions, marketing materials and social media posts are online from AI.

The median-priced home in California is now $830,620,  in Long Beach the December 2023 average sales price was $1,060,056 and for a condo it was $557,532--but that varies: the 90803 zip code average price for condos was $741,333.

With the softening of interest rates (remember, an 800+ credit score gets you the best rate, so take care of your credit), buying a home may be more possible for buyers and sellers alike.  Please contact me with any questions, sometimes all it takes is a conversation to help get you started.

 

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

Interested in Owning/Living in 2-4 Unit? New Lower Down Payment

Mediterranean duplex style

 New loan limits are in place for 2024, by both FHA (Federal Housting Administration) and FHFA (Federal Housing Finance Agency).  FHFA is the regulator of both Fannie Mae and Freddie Mac loans. The new conforming loan limit is $766,550, an increase of $60,000 over last year's limit.  For FHA loan, popular among first time buyers, the limit is $498,257.  But due to higher cost markets in some areas, in California, New York, the District of Columbia, Hawaii and other pricey markets, the limit for FHFA conforming loans in 2024 will be set at $1,149,825.  

Also, as of last November 18, 2023, FNMA is accepting 5% down payment on 2, 3 and 4 unit properties.  They must be owner occupied in at least one unit.  This lower down payment allows the purchaser to put more money towards standard purchase costs, property maintenance or reserve funds for the future.  To obtain qualification information, the buyer needs to contact an experienced loan officer for more information on all loan limits and financing. A buyer should also learn about owner/tenant laws, and more, assuming other units will be rented out, which of course brings in income on the property. This lower down payment is a huge benefit to buyers interested in residential multi-unit purchases.
For representation to purchase a property and assistance with all contract and disclosure aspects of buying, please contact me, a REALTOR since 1994.

 PROPERTY SEARCH:  Find multi-family units at this link and complete the form for residential income, select "active", and then under "property subtype" select (use control button) duplex, triplex, quadraplex, multifamily, and then click "Apply".  Long Beach and Lakewood, as of January 17 have approximately 48 active multi-unit listings in the MLS at all prices. Some listings may show a "Down Payment Resource" link to another site for financial information for the buyer, as well as directions, map location of property, and other tax and feature information.

This search box may be used in multiple areas for multiple types of properties. Please contact me for further information about areas.  The information you see at this link is directly from the MLS, however if you have questions or are looking for in depth assistance, please let me put my experience to work for you.

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