Are New California Homeowners Prepared for Home Maintenance Costs?

According to a recent survey discussed in the Scotsman Guide, 70% of a poll of 1600 recent homebuyers  had one major regret in their buying experience: reasons tied to "cost-based remorse".  Buyer, or seller, remorse is not unusual, nor has it ever been no matter in what market a transaction occurs--much of it, I believe, is due to unexpected aspects of the experience.  It's impossible to predict all events, but the more preparation, planning, and advance knowledge a party has, the faster the remorse will subside. 

1920s Spanish bungalow

In today's market of fast moving market of competitive bids, advance preparation about costs and the subsequent homeowning experience is essential--because often in a fast-paced bidding war, time to think things out slowly doesn't exist.

Costs of owning your new home should be considered before you begin your househunt:

1. Age of home

2.  Location (nearer the ocean means salt air can affect paint and old foundation concrete)

3. Pest control (inspections every 2 years, please--termite and dry rot issues)

4.  Plumbing (replace sink and toilet valves before they break down or become impossible to turn; water heater may need replacement after a few years; waste lines; sewer lines)

5. HVAC system (vents need cleaning, furnace filters need replacing)

6. Gutter cleaning (clogged gutters cause water issues)

7. Fences (wooden ones degrade)

8. Landscaping maintenance 

9. Roof (Composition roofs with one layer may last 20-25 years--less if more layers)

10.  Home insurance (may go up due to rise in claims, climate issues, location)

How to budget for these costs on a general basis?  

Try the 1% rule: If the selling price was $700,000, reserve $7000 annually; or using the square footage rule, a 1200 square foot house will mean saving $1200 per year.  This may also depend on whether you own a single family home or a condominium (but monthly dues are also a homeowner cost). These are only initial estimates, but will also help a homeowner prepare.  More guidelines are at this site by State Farm (I'm not endorsing this company, only providing a link as a guideline). The buyer should search several sources, including their own insurance company, to gain estimates.  And see this real-life home-buying example of a couple in Gardena California and their cost/budget experience

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

Long Beach Residential Unit Market

Did you know ...?

There continues to be a demand for Long Beach residential rental housing, and rents are at a premium.

The average sold price for a 4 unit property in 2021 was $1,321,209, which is up from an average price of $1,165,367 in 2020.*

Belmont Shore units

The average sold price for a 2-3 unit property in 2021 was $987,857, up from an average price of $883,062 in 2020.*

Currently, the average list price in Long Beach for 2-3 unit properties is $1,094,045, and for 4 unit properties the average list price is  $1,336,468.  Actual rents for  a 2 bedroom/1
bath may average about $2150/month, with proforma rents being a little higher depending on the size and area location, i.e., downtown, North Long Beach, Belmont Shore.* 

The last 90 days of average sale price of a 2-3 unit property, citywide, is $1,153,356 -- 24 of 59 properties sold over list price.  The average sale price for a 4-unit property is $1,375,283 -- 4 of 18 properties in the same time period sold over list price. 

 

Unit sold prices in Long Beach

To see active listings for duplexes, triplexes and 4-unit properties in Long Beach, please go to this search  which may be revised to include other types of properties, and other cities.

For an online (or in person) valuation of your income property, just contact me.

 *Information from CRMLS.                    

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

Long Beach Condominium Market--More Affordable for Many Buyers

 

Currently there are 62 active condo listings in across Long Beach, with the overall average price being $562,469 per MLS data.  This is a lower number than the 90 current house listings, however, SFR average price for the entire city of Long Beach is $1,226,196, significantly higher than the condo average.  While condo prices range from $1,500,000 down to $270,000, the median and average prices are well below $600,000.  

There are currently 131 condos in escrow with an average of 29 days on market, while there are 100 single family homes in escrow with similar days on market, and of course at a much higher average price than the condominiums.  

Condominiums are located throughout almost all areas of Long Beach and provide an avenue to homeownership in a neighborhood which may otherwise be totally unaffordable to the buyer. Older HOAs may not offer enough parking for all owners because the building requirements before the 1980s were different, but later developments were required to offer a parking space per the number of bedrooms in a unit.  And, older developments were most commonly built with community laundry rooms, while later ones offer inside laundries and central air and heat.  Many older buildings, however, feature more interior square footage and seem more spacious. Condominiums may have more rules to meet for lender approval on a buyer loan, because the lender looks not only at the unit, but also at the common area maintenance and condition, so buyers searching for a condo home should keep this in mind.  Rules and regulations of HOAs are part of the buyer's new homeownership--living in a condo is a certain way of living that is different than a single family home, but in today's market, especially, it offers ownership opportunity.

Long Beach also has some lower priced stock cooperatives and own-your-own properties which appear to be condos but are not, which are also affordable buyer opportunities, but do have some different mortgage requirements. If you find such a property on the market and want to find out more, please contact me.  To find condos on the market in Long Beach, go to my condo search .

If you're a seller thinking of making a change and you want to put your condo on the market, please contact me for important information about selling your condo. I have 25 plus years of experience and have sold numerous condominium units.

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

Who Wants to Buy a House? Millennials Do Too.

If you watched 60 Minutes on March 20th, you probably saw the segment with Lesley Stahl about the rental market, specifically the corporate rental market.  While Gary Berman of Tricon, whom she interviewed, stated that the corporate landlord represented only about 2% of the total national rental market, it is a powerful segment.  Because their homes are turnkey in a rising market, their rents may be up 30% or more compared to a previous year: examples were 35% higher rents in New York, 39% higher in Portland, 10% higher in Los Angeles, but surprisingly down in Kansas City.  There has always been part of the population which by choice prefers to rent--such renters actively do not want the responsibility of maintaining property.  And then there is the segment of the population which may have good income, but is cash poor, or has credit ratings below the mortgage approval guidelines.  But increasingly are those young renters who would like to buy their first home, have excellent qualifications to get a mortgage but may not have enough cash to compete in over-list-price multiple bid offers or enough to obtain a 20% down loan, perhaps 5% down is the best they can do.  

 View from porch of home

But one thing that I don't believe is true are the younger buyers--typically in the under-40 millennial age group--who have been characterized in multiple media sources in the last few years as being uninterested in owning a home.  This was made clear by the young couple spotlighted in the 60 Minutes show, who directly contradicted the statement made by Mr. Berman that millennials "don't desire to own a home" because their main emphasis is living in a turnkey space and thus fit the profile of "You can rent the American dream" as opposed to owning it, which young couple made it clear they wanted to be able to buy a home, but competing in the current buyer/seller market was extremely tough for them.

In my experience, adults of all ages would prefer to live in a turnkey home, not just younger adults: and if not turnkey then a home purchase that presents a clean, relatively updated condition.   The view that younger adults don't care about owning a home is a misrepresentation that can ultimately deny them the opportunity to own, thereby gaining housing and community equity.

The current trend in asking buyers to remove standard contract contingencies can be a direct pathway to housing disaster for  a number of reasons--yet this is what many younger (and older) adults encounter in the home offer process, and is indeed discouraging, and just influences their continuing status of being a renter when they would like to be an owner.  The upward price climb is staying in motion, but other things do not have to, and should not.  Sellers should be advised of the risks involved.

See the 60 Minutes video .  

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