Mid-Year Forecast for California's Housing Market - 2021

Home in Alamitos Heights

In his July 28, 2021 Report, California Association of Realtors economist Jordan Levine recapped what's going on the real estate market so far this year:

1. The share of first time buyers is the highest in 10 years, fueled by low, low interest rates--two of every five homes was sold to first time buyers--while there are fewer repeat buyers in the market because fewer current homeowners are selling.

2. First time buyers are also more affluent:  33% of these buyers have 20 percent down payments, or higher, while only 10% are using zero down loans.

3. Vacation and second home sales are highest in four years.

4. The first half of 2020 ended with a 33% increase in home sales, and a 37% decrease in inventory, making a very competitive market for buyers.

5.  Statewide, 71% of home sales closed over asking price.

6. Despite COVID, 20 California cities grew by 40% last year, with Big Bear, Malibu, and Montecito being the top 3.

7. And 30 cities almost doubled in sales growth in 2021 compared to 2020:  Palos Verdes Estates (148%), Signal Hill (109%), South Pasadena (116%), to name several.

8.  The fastest growing sales were in San Francisco area and Southern California as of June 2021.

9. In May 2021, condo sales rebounded almost 160% by June 2021.

However, housing supply and overall affordability continue to be issues, and the need for more housing is still urgent.  Sales are expected to slow, there may be more inventory (which overall is still low) but the median price is not predicted to go down for the remainder of 2021. 

If you're a local homeowner thinking about selling, please contact me for an evaluation of your home, units or condo.

 

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

The Issue of Buyer "Love Letters"

 

In a highly competitive market, what serious buyer doesn't want his/her/their offer accepted?  A growing practice starting on an occasional basis, say, in the 1990s, to an almost constant basis in the more recent market, was for the buyer to accompany an offer with a personal description of themselves, their motivations, possibly their family, which sometimes included photos, all in the effort to obtain the seller's favor over another offer, because the most preferred neighborhood is, for example, the one where the park in the photo is located--there's a great school there, they have friends or family there, any number of reasons.  But this practice, which locally became the norm with offers, gave sellers additional information about the prospective buyer not available just from reviewing an offer alone, along with the issue of  possible unintended bias.  It finally came to the attention of REALTOR professional associations, and ultimately resulted, in California, in an advisory form published in October of 2020, given to both the buyer and the seller, concerning state and federal laws on fair housing and discrimination.  Because how would a buyer really know, especially after viewing photos and other personal history, on what basis a seller was choosing an offer? Sellers are human, and they sometimes have a preference for who they would like to see move into their home. It may not be based on race, it could be based on preferring someone with children, or not.  Personally, I've never liked this practice and never asked my buyers to use it.  The practice is not currently forbidden, but it is officially heavily discouraged in the profession, and I advise my clients to not submit such a "cover letter".  Offers need to stand on their own merits.  There are already enough challenges in the current market, i.e., a buyer needing financing vs. a buyer who can pay all cash.

The Fair Housing and Discrimination Advisory, published by the California Association of Realtors, is a two page form outlining state and federal housing laws, including the protected classes, a reference to the National Association of Realtors applicable Code of Ethics article, and examples of improper housing conduct which violates a protected class or characteristic.  The form also includes examples of positive practices.  These state and federal laws have long been in effect, for years/decades, and are included in a real estate agent's training on a regular basis, but the need to remind all parties involved in a real estate transaction became evident. Additionally, some appraisals have been questioned for similar reasons, read the story about the Oakland homeowner and an appraiser in that area.

If you would like a sample copy of this form, please contact me for more information.

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

Long Beach Market Update for July, 2021

As of July 1st-30th, the number of single family homes sold in Long Beach totaled 192, price ranging from $375,000 to $6,600,000.  The MLS shows that 39 sold under list price, all others sold at or higher than original list price, some times significantly higher--in all price ranges.  

For instance, 420 Monrovia Ave., in Alamitos Heights area of Long Beach, was listed at $2,299,000, on 6/18, then increased in price to $2,499,000, then sold on 7/26/2021 at $2,400,000.  It went into escrow the same day it became active in the MLS.

3817 Albury was listed at $549,900, and closed at $605,000, after 2 days on the market. 

Similar stories of a  sold price of $50,000 increase over list price are not unusual. 

The median Long Beach sale price for July was $705,000, where median list price was $705,000 and the median sale price was $738, 750.  The Long Beach average list price was $696,293, average close price was $714,770 with an average of 13 days on the market.

Yes, there are some properties that have been on the market for quite a while, still waiting for a buyer.  The longest is 346 days for a multimillion asking price in the Naples area, but another one listed for $799,000 has been waiting for a buyer for 114 days as of July 30th.  Park Estate, Belmont Heights, Carson Park, all have a few listings that are waiting for a buyer, so not absolutely everything is selling in less than a week, although buyers should be prepared for moving quickly on most properties.

There were 113 condos that sold in the same time frame, with the majority selling over list price also. But the median price is $436,500, median sell price is $445,500, days on market 12.

If you are thinking of selling, or would like to evaluate your possible sell price at this time, please contact me via phone or email.  I look forward to hearing from you!

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

Is the California Real Estate Market Going to Fall in 2021?

California has just experienced the strongest house price ever recorded in May 2021.

In this housing presentation in May for Orange County Realtors, a lot of the  current market issues were covered by the CAR Economist Jordan Levine.

Statewide, prices are up overall $100,000 since 2006, and so are mortgage payments.  The highest dollar amounts cashed out in home equity were in the 2004-2007 years (as much as $80 billion in one year), and in 2020-2021 another increase in the $40-$50 billion range is here, explaining what?  Remodels? helping the adult children with their down payment?

Even with lower interest rates, affordability is not keeping up; 27% of Californians can buy a median priced home, compared to 50% in 2012. And building permits for single family homes has not increased significantly in 10 years--about 50,000 issued in 2020 compared to 150,000 permits issued in 1988. However, as affordability rate declines, the 2021 median home price is predicted to be $712,000 for the state, and in some areas is already higher than that. 

For a home evaluation, please contact me via text or email, even if you're not thinking of selling in the near future, an idea of your home's value whether condo, SFR or multi-unit, is wise to keep track of.

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