What's Ahead for the California Real Estate Market in 2019?

The annual California Association of Realtors Trade Show was held earlier in October, and it's always the time for the next year's market prediction.  So the main points are:

Calif Market Outlook 2019

• There will be modest decline in sales volume to 3.3% for 2019 for single family homes, or a total of 396,800 units, down from the projected 2018 sales figure of 410,460. The 2018 figure is 3.2 percent lower compared with the 424,100 pace of homes sold in 2017. In other words, 2019 will be about 7% lower in sales volume from 2017.
• The California median home price is forecast to increase 3.1 percent to $593,450 in 2019, following a projected 7.0 percent increase in 2018 to $575,800.  
• Fixed mortgage rates to rise to 5.2%.
• “The surge in home prices over the past few years due to the housing supply shortage has finally taken a toll on the market,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “Despite an improvement in supply conditions, there is a high level of uncertainty about the direction of the market that is affecting homebuying decisions. This psychological effect is creating a mismatch in price expectations between buyers and sellers and will limit price growth in the upcoming year.”  
• Outmigration, from the home county or from the state, is a concern, in 2018, 28 percent of homebuyers moved out of the county in which they previously resided. 29 percent of sellers moving out of California, up 10 percent from 2013.
• New housing supply, big issue.
• Affordability: Move to Lassen County or Kern County for lowest prices in U.S.,  least affordable areas in U.S. are Los Angeles, San Diego, San Jose, Oxnard, San Francisco 
• California is home to largest number of homeless. 
• New York and California have lowest rate of homeownership, Michigan and West Virginia have the highest.
• In 2017, cities with lower renter rates (under 50%) ,were Lakewood, Menifee, Temecula, Whittier, Yorba Linda, while over 50% cities are Long Beach, Bellflower, Alhambra, Costa Mesa, Pasadena, to name a few. 
• 
  
• So now could be the time for buyers to get moving before rates go any higher, maintain good credit (or improve your score now), and find the best loan out there.
• Please contact me for any help to buy or sell: Sellers, prices are very favorable for you and will continue to be, so contact me for your moving plans!
 

 

 

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

Average Selling Prices in Long Beach, Cerritos, Lakewood, and Local Counties, August 2018

Currently on Long Beach market for $474,999

All these prices are for the month of August, 2018, based on data from CRMLS Infosparks:

Average prices for single family homes in Orange County are $1,098,542, while Los Angeles County as a whole is now at $997,845, and San Bernardino County's average is at $371,677.

Average single family home prices vary according to area, and here's what they look like locally:

August, 2018

Long Beach
$759,955 | +10.7%

Lakewood
$609,570 | +5.2%

Cerritos
$825,082 | +6.6%

Los Angeles County
$977,845 | +7.7%

San Bernardino County
$381,677 | +6.7%

Orange County
$1,098,542 | +7.6%

These statistics show a mix of pricing, with Long Beach at an average days on market at 18 days, Lakewood at 18 days on market, and Cerritos at 22 days on the market on average.  Inventory time on market has increased in the three cities compared to April, up to 3 months (standard is 6 months), and closing prices still continue within 1.5% over or under the original price.  In other words, since the last analysis in April 2018, houses are still selling within 2% of original list price, with a lower time on the market, and a slightly higher  housing inventory from which to choose.   

Condos

Briefly, Long Beach condo average price is $437,911, about the same as in March, 2018. The condo average for Los Angeles County is $602,193, a slight decrease from last month. Other local city condo prices: Cerritos: $414,000 (increase from April);  Monterey Park, $559,875; Pasadena, $632,182 (decrease from April); Whittier, $352,089 (small decrease from April).

 It’s a somewhat looser market right now!

For an online and automated home valuation, try my site at http://www.juliahuntsman.com/home-evaluation.  It probably works more accurately for single family homes than condos in some areas, depending on what properties lie within about a one-mile radius.  Try it!  And I am always happy to do a more customized report to send out via e-mail.  If you're thinking about making a move, do it! It pays to keep an eye on things.

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

Just Listed, Single Family in Long Beach for $474,999

 This house has room to grow, nice size rear yard.  It may look modest on the outside, but it has just recently been upgraded with a new kitchen and bath remodel, plus new dual paned windows, new vinyl flooring, and new paint inside and out. Dishwasher and gas stove are included.  Half block to Dooley School and walking distance to middle school.  Also close to public transportation.  List price $474,999, MLS PW 18214312.  Really nice opportunity to just move right in. There's plenty of driveway parking, and a brick patio area in the rear yard for entertaining. Garage has been converted to workshop area (buyer to investigate permits), with a 2nd bathroom (also permits unknown) with a large shower, electricity in garage and finished walls with tiled floor (try investigating if it will work for a conversion to a legal Accessory Dwelling Unit).  Three bedrooms and dining area with a lovely chandelier separate from the kitchen make this a really nice cozy opportunity.
Call me for more information! or go to this link on MLSTouch for more information:
https://bit.ly/2MI5JLX

Update:  Sold, for $470,000, November 21, 2018.

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

Long Beach Housing Inventory

 We're hearing more talk about market slowing, a little early for this time of year.

There's still far less than the traditional months of inventory on the market, i.e., 6 months meaning how long it would take to sell what's currently for sale.  In Long Beach, it's almost the same for both single family homes and for condos:  2.4-2.7 months of inventory. 

And yet, the number of sales compared to June of last year is down about 28%, while the average sales price for houses and condos are UP!  This is also true on the state level, according to California Association of Realtors: "June marked the fifth consecutive month that prices increased by more than 8 percent annually, indicating that price appreciation remains robust and is not showing any signs of leveling off."  But Orange County experienced one of the biggest declines in number of sales, all counties experienced a decline however, possibly due to buyer fatigue at rising prices.

Many younger buyers are able to get some financial help from families who may aid with down payments, which is a great help for them. One surprising fact is that single women over 55 are a growing segment of buyers, citing rising rent costs as a reason, not for the purpose of purchasing multigenerational housing.

Interest rates are remaining the same for right now, but a possible increase is hinted at in September. The mortgage lenders and banks, however, usually anticipate an increase in advance and build it into their scenarios in advance, but other global market effects come into play also, and there can even be a decrease in rates!

Currently, the average days on market for all 228 Long Beach single family homes currently in escrow is 45 days. It's a very good time to sell and find a new home.

For more information about selling, please contact me!


Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996, representing buyers and sellers since 1994.

Luxury Homes in Signal Hill

Crescent Square Homes have room for everyone, 4 bedroom homes--3.5 baths--designed for multigenerational living.They are three stories, with an option for an elevator.  There's room for 3 cars. Fully equipped kitchens include a kitchen island, but there's a formal dining room too! The upper level even has a kitchenette in Model 2.

In keeping with the City of Signal Hill's past, the exteriors blend with Spanish, Craftsman, Colonial or Monterey styles of architecture.

Currently, there are still several homes available ranging from approximately $941,000 to $1,028,647 (the average price of a single family home in last 90 days is $911,718). More features include large walk-in closet, outdoor covered balconies, tankless water heater, private master suites. Located adjacent to Long Beach, a new homeowner can take advantage of local Signal Hill shopping and restaurants (including Costco and Mother's Kitchen), but also a quick drive to the beach, classes at Cal State Long Beach, or dining in Belmont Shore.

To take advantage of this new home opportunity please contact me right away!

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

Dear Buyer: Did Your Offer Get Presented to the Seller?

In the current climate of multiple offers submitted by anxious buyers, circumstances on some properties may lead a buyer to wonder if the seller was ever made aware of his or her offer.

First of all, unless the seller has waived in writing, all offers are supposed to be presented to the seller--this is the listing agent's fiduciary duty to the client--whether verbally, in writing, or in person by the listing agent or in person by the buyer's agent.  But in today's world, the buyer's agent does not usually personally present to the seller, and the buyer relies on the listing agent's word that their offer was presented.  Through the end of 2018, there is no ethical or legal requirement for a listing agent or the seller to respond in writing or otherwise to a buyer's offer. It is regarded as a courtesy.

But starting January 1, 2019, there is a new requirement. Per a new Code of Ethics requirement by National Association of Realtors, " a listing broker or agent is required to confirm in writing that an offer was submitted to the seller if the cooperating broker who submitted the offer so requests. The listing broker or agent must provide the written affirmative unless the seller has waived  the obligation to have the offer presented."  So, 1) the buyer broker must request confirmation (there are several ways to do this), as long as 2) the seller has not already waived the obligation to have the offer presented.  The seller does have the option of waiving offers (best put in writing with the listing agent) if the seller wishes to avoid offers under a certain price, or with certain conditions he/she does not want to meet, i.e., a longer escrow period.  Sometimes under these circumstances, the buyer may decide to rewrite an offer in order to get the seller's attention.  Otherwise, if the buyer's agent requests it, the listing broker, or listing agent, will be required to submit confirmation in writing that the offer was presented, and this is most often done by checking and signing for a box on the offer form.

If you would like to know more about making an offer to a seller, please contact me!  There are many aspects to the offer forms via the California Association of Realtors, and early familiarity with them will make your transaction easier and smoother.



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

California Homeowner Associations Are An Owner Option for Many

Homeowner associations continue to be a popular form of ownership for all age groups.  In 2006, there were 43,000 homeowner associations in California, housing between 8.5 million to 10 million people.*  The Aliso Viejo Community Association in Orange County alone had about 15,300 units at that time. Such associations are favored by cities because HOA members help shoulder the newer infrastructure costs through their dues paid to maintain their common areas.

So a 2018 survey conducted by Community Associations Institute demonstrating owner satisfaction in these communities might also be a reflection of what today's housing choices are in many areas, including Orange County where HOAs are prevalent.

But in spite of that, many people do see advantages: affordability, convenience, safety, uniformity, shared responsibility in costs and maintenance, and association recreation features.

Common complaints are rising HOA dues (or having to pay any at all), architectural standards which may seem restrictive, unpopular rules, complaints about the Board of Directors, and lack of rules enforcement, to name a few.

But as the graphic shows, the CAI survey results show:

 When it comes to fees that are assessed monthly but often paid quarterly, prospective buyers or current homeowners should remember that these amounts cover certain basic services such as insurance premiums for the common area services such as roads, pools, and tennis courts, maintenance for these features, certain utilities such as water and trash service for each unit, BBQs and recreation rooms, which they might otherwise have to pay for if they owned a non-HOA home, or might otherwise not have some of those facilities at all.  And such costs continue to rise in California as insurance risks also rise.  However, for many people, multi-family style condominiums are an ideal entree to homeownership in certain areas, much more affordable than buying a single family home in the same neighborhood.
A well-managed association can be a blessing for some, but if not well-managed, or with Directors who do not enforce the CCRs or understand them very well, there can be challenges.  CCRs, voted into existence by the owners after initial setup by developers, are a contract between the owners and the Board of Directors.  They are the underlying foundation of operation in the community, along with the By-Laws and the Rules and Regulations.  Very important to follow them!

If you are interested in a condominium, townhome or house in a homeowner association or PUD, please contact me.  I have experience with this type of property and can help you navigate your way into your next home!

Julia Huntsman, REALTOR since 1994, Broker | www.juliahuntsman.com | 562-896-2609 | CA Lic. #01188996

* https://www.ocregister.com/2006/11/12/educating-hoas/ 

Where are California's Foreign Buyers Coming From?

Foreign buyers in California

Here is a question recently posed to CALMatters, a website dealing in housing data for California, "How much are foreign buyers and investment firms—two of the most common sources of all-cash transactions—impacting the average California family’s ability to buy a home?"

All cash sales have been the nemesis of buyers for over a decade.  As prices rise, many lower priced homes get snapped up by investors wanting to build a rental portfolio, investors who want to flip properties, or buyers who, if not paying all cash, have a 50% down or more down payment.  International buyer numbers have grown, especially on the West Coast, especially in areas such as San Gabriel Valley, Arcadia, San Marino, Newport Beach and Irvine, where buyers from China gained a foothold in the past and have increasingly congregated over time.  For Chinese buyers in particular real estate investment is a good strategy, they view American properties as "cheap" compared to what investments cost them in the city/country of origin.   While China has been eyed as the competition by buyers here, the fact is that "As recently as 2014, Canadians purchased more U.S. homes than Chinese buyers, according to the National Realtors Association.  But right now foreign investors are also favored by the EB-5 visas which grant green cards to large investors.


But the truth is that citizenship or national origin is not specifically a part of any real estate transaction, so there are assumptions made based by tracking the cash transaction statistics, because it is believed such foreign buyers are one of the impacts on prices here.  The British Columbia government levied a 15% sales tax on foreign home buyers to curtail the market impact in areas such as Vancouver, but prices are still out of reach of the average family there. Another rule limiting Chinese buyers from taking more than $50,000 to bring here has had some impact, but there may still be ways for purchases to be accomplished.  There are arguments over the impact of foreign buyers on statewide pricing, as they tend to target certain properties in some areas.  Obviously, there are other things having an impact, such as all the properties bought in the down market by investors which are still off the market and held for rentals, and the fact that fewer housing units are built to keep up with demand. 

So how many properties have been cash transactions in Southern California?   Go to this interactive map to find your area.  Overall, since 2013, percentages range from 13% to over 30%.  Long Beach 90803 zip code is 21%; 90802 is 28%, Newport Coast 33%, Signal Hill 13%,  whereas Malibu is 38% cash sales.

Some information is available here for foreign investors. If you wish to buy in Los Angeles or Orange Counties, please contact me for a comprehensive look at the market, referrals to financing, and details on properties currently on the market.  I am a Realtor with over 22 years of experience, and a Southern California native.

Average Selling Prices in Long Beach, Cerritos, Lakewood, and Local Counties, April 2018

For a single family detached home, the average prices for the cities and counties below range from $381,718  to $1,141,966, the low price being in San Bernardino County.


Overall the Los Angeles County average price for single family home is $992,808, a small increase from the previous month of $969,831, and now exceeding the high of July 2017.

All these prices are for the month of April, 2018, based on data from CRMLS Infosparks.

Long Beach average price is slightly decreased from the prior month, but Orange County has surpassed the high of May, 2017, while Los Angeles County as a whole is now above the high of $955,973 in July 2017.  San Bernardino County's averages also exceed the earlier highs of $360,000, and is now at the the highest point in the last 5 years. Average single family home Pprices are varying according to area, and here's what they look like locally.

April 2018

Long Beach
$685,445 | -4.1%

Lakewood
$600,580 | +8.2%

Cerritos
859,816 | +5.2%

Los Angeles County
$992,808 | +9.0%

San Bernardino County
$381,718 | +11.2%

Orange County
$1,141,966 | +14.2%

These statistics show a mix of pricing, with Long Beach at an average days on market at 28 days, Lakewood at 24 days on market, and Cerritos at 34 days on the market on average.  Inventory is still at 2 months or less in all 3 cities, and closing prices continue within 1.5% over or under the original price.  In other words, since the last analysis in November 2017, houses are still selling within 2% of original list price, with less time on the market, and a low housing inventory from which to choose.   

Condos

Briefly, Long Beach condo average price is $395,639, a decrease from $437,000 last month. The condo average for Los Angeles County is $602,193, a slight decrease from last month. Other local city condo prices: Cerritos: $370,000;  Monterey Park, $439,500; Pasadena, $715,634; Whittier, $353,692.

 It’s a tight market right now!

For an online and automated home valuation, try my site at http://www.juliahuntsman.com/home-evaluation.  It probably works more accurately for single family homes than condos in some areas, depending on what properties lie within about a one-mile radius.  Try it!  And I am always happy to do a more customized report to send out via e-mail.  If you're thinking about making a move, do it! It pays to keep an eye on things.

P.S. The photo is a door in Dublin, Ireland, where the housing market is pretty similar to our West Coast!

Julia Huntsman, Broker Realtor

Lic 01188996
www.juliahuntsman.com

Signal Hill View Home, Promontory Crest

 Beautiful luxury home in Signal Hill offers panoramic views in Promontory Crest, offered at $1,148,000.
This exceptional two-story home offers three bedrooms PLUS a large office, beautiful kitchen, dining area.  Maple hardwood floors, granite in the kitchen, plantation shutters, and wired sound are just some of the extras in this home.
The views are extraordinary and the location is ideal in one of Signal Hill's nicest developments.
Promontory Crest offers its members a pool, spa, barbecue, outdoor cooking area, playground, and hiking trails.

Open house this weekend on Sunday April 29th, please contact me for more information, easy access through HOA's gated entry.
Lic #01188996

 See more at http://www.juliahuntsman.com/open-houses.html






Listing Broker:  Time Realty

New Measure on Ballot for Nov. 6th--Get Rid of the "Moving Penalty"

The Property Tax Fairness Initiative (Portability) has obtained enough signatures to qualify for the November ballot in California.  This is good news, because now owners over 55 years of age could have the opportunity to take their Proposition 13 tax base anywhere in the state, not just select counties, and be able to use it more than once.  The campaign to gather signatures has been successful through the efforts of the California Association of Realtors, and the many Realtors who helped to get the word out and obtain signatures.

If passed, this Initiative would allow homeowners 55 and over to transfer their Prop. 13 tax base to a home of any price (current limitation is a sale price equal or lesser than sale price of original residence), to any county in the state.  Currently, there are only a minority of counties (as per Prop. 60 and Prop. 90) which participate in this plan, creating geographic disincentives to move since moving to a non-participating county could cause a huge increase in property taxes for those in fixed-income retirement or nearing retirement mode.   Currently, a homeowner living in Los Angeles County can benefit from current Prop. 13 tax base if they sell and stay within L.A. County, or sell and go to Orange County, Riverside County, and numerous others in the group--but with the passage of the new tax portability, a homeowner would still be paying a Prop. 13 fair share tax, but would be given the benefit of moving to any county and not lose their base.

The passage of this initiative would benefit a lot of people beyond the 55+ age group, it also applies to people who are disabled and those who have lost their homes to a natural disaster.  Additionally, more movement would be created in the residential real estate market, potentially creating a lot of economic benefit to move-up and first time buyers in what has been a very tight inventory.

Sample scenarios from the California Association of Realtors:

"Buy Up Example 
Original Purchase Price: $100k Estimated
Property Taxes: $1k/annually
Existing Home Sale Price: $300k
New Home Price: $400k
New Property Taxes: $2k/annually.
The $100k difference between the $300k sales price and the $400k purchase price is added to the original Prop. 13 property tax base of $100k for a new Prop. 13 tax base of $200k.

"Buy Down Example
Original Purchase Price: $100k
Estimated Property Taxes: $1k/annually
Existing Home Sale Price: $300k
New Home Price: $200k
New Property Taxes: 1/3 of $200k = $67k or $670/year for property taxes
If a homeowner buys a less expensive home, the property taxes will be proportionally the same as for the original home. In other words, if the tax base was one-third of the sale price, the new property tax would be one-third of the new sale price."

Please follow this issue as the year progresses!!
I am available for home value information at my phone contact information, or through my website.

Update: May 8:  At their recent meetings (Sacramento, May 2 -- 5), California Association of Realtors directors voted to pursue an alternative to the ballot initiative... It would be to seek support to have the legislature place the issue on the ballot in 2020. By seeking such legislative support, CAR would be able to free up resources to address other crucial issues in 2018. Whether this alternative will be possible won't be known until late June.

What California's Homeowners Should Know about Taxes After the 2017 Reform Act

• The limit on deductible mortgage debt was reduced.
• Mortgage debt may be refinanced up to $1 million and deduct interest if not higher than original mortgage.
• Equity loan interest is deductible if proceeds improve the residence.
• Second home mortgage interest deductible subject to limits.
• Itemized returns may deduct up to $10,000 on applicable taxes.
• Capital gains exclusions remain the same-$250,000 for single and $500,000 for married filers.
• The California housing market may see a 2018 decline in inventory as owners stay put, but an increase in home prices.
• Please contact your tax professional for your particular tax situation.

Two New California Landlord/Tenant Laws for 2018

Numerous laws have been passed or updated in recent years dealing with and regulating landlord/tenant relationships, which should be of interest to all property owners who lease or rent out property.

Flood Disclosure - Effective July 1, 2018, a new law requires a landlord (or the agent) to disclose in writing in every written agreement entered into on or after 7/1/2018 information about flood hazards, including the landlord's "actual knowledge".  This disclosure consists of pre-printed language about floods, services, and renter's insurance, and 2) the owner's knowledge if the property is located within a flood zone.
Special hazard areas in which flood insurance is required and flood inundation areas from dams are included in this disclosure.  If the owner has or is currently carrying flood insurance or received public notice concerning being in such an area means the owner has "actual knowledge".  Should the landlord use a Realtor for a lease/rental after this date, this law will be complied with through a Realtor form available starting in June, 2018.

Protection of Immigrants in Residential Housing - A new law concerning residential housing, part of a group of 11 new laws protecting immigrants, prohibits any threat to disclose information relating to immigration status with the intent of "harassing, intimidating or retaliating, or influencing a tenant to vacate".   This new law explicitly states that the landlord may disclose information as part of complying with legal obligations under federal law. Landlords  are advised to understand and comply the new definition of immigration and citizenship status in order to avoid the monetary penalties which could be imposed by this law, which are in addition to all other damages. Landlords, as a best practice, should verify all financial qualifications and necessary identity of a prospective tenant before approving a tenant to take occupancy.

If you would like to know more about this and other landlord/tenant requirements, please contact me for more complete information as provided through the California Association of Realtors
, or contact your legal advisor.

A California Real Estate Update for Some 2018 Housing Laws

Senate Bill 2 became a 2018 law. Building Homes & Jobs Act.
This enacts a recording tax of a flat $75 per every document which is already required to be recorded, on every real estate instrument not part of a sales transaction, and the funds of which are allocated out largely to address the need for affordable housing, and according to one source is expected to generate $200-$300 million annually.  The good news for homebuyers is that this law does not affect owner occupied home purchases or home refinances.  There are some exemptions, and the fee is capped at $225 per transaction.  The documents that will be charged include:

"deed, grant deed, trustee’s deed, deed of trust, reconveyance, quit claim deed, fictitious deed of trust, assignment of deed of trust, request for notice of default, abstract of judgment, subordination agreement, declaration of homestead, abandonment of homestead, notice of default, release or discharge, easement, notice of trustee sale, notice of completion, UCC financing statement, mechanic’s lien, maps, and covenants, conditions, and restrictions."

The exemptions to the fee are: 1. If document is already subject to the Documentary Transfer Tax; 2. If it is real property in an owner-occupied purchase; 3. If the document is not related to real property.
The title company involved in each transaction must now attach a cover sheet to each document involved that shows a declaration of exemption for that particular document, or will get charged the fee.

Senate Bill 35 amends the Planning and Zoning law to create a streamlined approval process so that cities can meet their mandated housing goals and a stronger requirement that cities report their annual housing production to the California Department of Housing and Community Development. California has been behind for many years on building the housing needed as its population increased by birth rate alone.  But how much affordable housing will increase is unknown, as the bill addresses only local governments that have fallen behind on their state goals for homebuilding. The bill had support by many entities.

Senate Bill 229 - Accessory Dwelling Units.  Already mentioned in a previous post, these units are allowed statewide and are also under "granny flats" labeling.  This law allows units in residential areas which were not previously zoned for more than single family residential growth, in order to increase affordable housing.  Long Beach, for example, was concerned about parking issues in some areas already impacted, and in October 2017, established additional clarifications concerning construction of these units, as have other cities.  However, none are supposed to supercede the law signed by Governor Brown in 2017.  The advantage of this law for many house owners is that an existing "guest quarters" can be upgraded to a legal ADU, or a garage (with all proper permits) may be legally converted to living quarters as an ADU, or an existing room of a home may be converted (with all proper permits and inspections) to a separate legal quarters. 

If you would like additional help on resources, or discuss how they might apply to your planned home purchase, please contact me.  I'm a licensed Realtor since 1994 (also a Broker).

Practicing Fire Prevention Safety for Your Home

1. Secure your roof.
2. Add Metal Mesh to Vents.
3. Use tempered Glass for Windows.
4. Clear vegetation.
5. Avoid flammable patio furniture

Effects of Tax Reform on Homeowners

Here is an excerpt from today's message from the National Association of Realtors on the effects of the tax bill expected to pass into law:

"Although the final tax reform bill is far from perfect, it is significantly better for homeowners than previous versions. That’s thanks to the efforts you made. REALTORS® generated over 300,000 emails and telephone calls to members of Congress over two Calls for Action and held countless in-person meetings with legislators, all of which helped shape the final product.

Last-minute changes to the bill include the following improvements:

• Capital gains exclusion. In a huge win for current and prospective homeowners, current law is left in place on the capital gains exclusion of $250,000 for an individual and $500,000 for married couples on the sale of a home. Both the House and the Senate had sought to make it much harder to qualify for the exclusion.

• Mortgage interest deduction. The maximum mortgage amount for households deducting their mortgage interest has been decreased to $750,000 from the current $1 million limit. The House bill sought a reduction to $500,000.

• State and local tax deductions. Both property taxes and state and local income taxes remain deductible, although with a combined limit of $10,000. Both the House and Senate bills sought to eliminate the state and local income tax deduction altogether.

• Pass-through entities. The bill significantly reduces the effective rate of tax on business income earned by independent contractors and income received from pass-through entities. This change will lower the taxes of many real estate professionals."

"REALTORS® generated over 300,000 emails and telephone calls to members of Congress over two Calls for Action and held countless in-person meetings with legislators, all of which helped shape the final product."

Average Selling Prices in Long Beach, Cerritos, Lakewood, and Local Counties, November 2017

It's that time of the year, where housing often slows down for the holidays, but here it's spending less time on the market.

For a single family detached home, the average prices for the cities and counties below range from $357,823  to $1,052,160, the low being San Bernardino County.

Overall the Los Angeles County average price for single family home is $923,612, a small increase from the previous month of $910,161, and still under the high of July 2017.

All these prices are for the month of November, 2017, based on data from CRMLS Infosparks.

Long Beach saw an average price decrease (but up from October), and Orange County is still  down just slightly from the high of May, 2017, while Los Angeles County as a whole is still decreased from the high of $955,973 in July.  San Bernardino County's averages have dipped under earlier highs of $360,000, the highest point in the last 5 years.

Prices are varying according to area, and here's what they look like locally.

November 2017

Long Beach
$667,858 | -0.7%

Lakewood
$570,839 | +2.8%

Cerritos
$776,412 | +9.9%

Los Angeles County
$923,612 | +5.3%

San Bernardino County
$357,823 | +5.3%

Orange County
$1,052,160  | +12.8%

These statistics show a mix of pricing, with Long Beach/Lakewood  with average days on market at 18 days, and Cerritos having less than 24 days on the market on average, less than 2 months inventory, and closing prices continuing within 0.7%-1.5% of original price.  In other words, houses are selling within 2% of original list price, with less time on the market, with a low housing inventory from which to choose.   

Condos

Briefly, Long Beach condo average price is $383,921, down from over $400,000 the month before. The condo average for Los Angeles County is $608,000. Other local city condo prices:  Monterey Park, $425,800; Pasadena, $713,622; Whittier, $353,692.

 It’s a tight market right now!

For an online and automated home valuation, try my site at http://www.juliahuntsman.com/home-evaluation.  It probably works more accurately for single family homes than condos in some areas, depending on what properties lie within about a one-mile radius.  Try it!  And I am always happy to do a more customized report to send out via e-mail.  If you're thinking about making a move, do it! It pays to keep an eye on things.

 

See this Chart on How Congressional Tax Reform May Affect California (and other states) Taxpayers

By the time the reader sees this, the tax "reform" bill may be a done deal, but here is how changes may very well affect California taxpayers. Visitors can see how homeowners will be impacted by the Tax Reform Bill. Check out this National Association of REALTORS resource, see Capital Gains exemptions and the impact on housing prices from the 2017 tax reform framework.

To see other tax scenarios for taxpayers in other states, click on this link and find a state in the drop down list.

Would You Like to Keep Your Calif Property Taxes Lower?

Taxes Due

Take Your Tax Base Anywhere in California

First off, July 1 is the beginning of the first installment property taxes are due by 5pm on December 11th, after which you will pay a 10% penalty, so don't be late! Your next last day to pay is the following April 10th for the second installment.

Ballot Drive - Freedom to Move
Next, did you know there is a signature drive on to expand Proposition 13 tax legislation?  Currently, there are 11 counties in California which allow senior and disabled homeowners to transfer their current property tax bases (Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, and Ventura), which is a good thing; however, the new home has to be of equal or lesser value, which in some areas may prevent some owners from moving.
To create more opportunities for potential sellers, California Association of Realtors is circulating petitions (I have already obtained signatures) to expand this rule which would "also allow them to apply their old property tax assessment to a new home that’s more expensive than the old one. The new assessment would be a blend of the old and new assessments, combining the old assessment up to the sale price of the old home with an additional assessment for the amount paid over that price on the new home."  The entire purpose of this drive to put this on the ballot for 2018 is to provide new opportunity for those older homeowners who are staying put in order to keep this tax expense down.   New scenario per article in OC Register:

• More expensive: Say a couple owned a home for 30 years and its current assessed value is $75,000, meaning they pay $750 in annual property taxes. They sell the home for $600,000 and buy a new one for $700,000. Their new tax assessment would be $75,000 plus $100,000 (the difference between the old home’s sales price and the new home’s sales price). Their new property tax would be $1,750. (vs. initial standard property tax on a new purchase of a $700,000 home of $8750 per year).
• Less expensive: Say the same couple sold their old home for $600,000, then paid $500,000 for a condo. Since the condo’s price is 83 percent of the old home’s sales price, the new assessment would be 83 percent of the old, or $62,500. Their new property tax would be $625.

Under this proposal, there would be no limit to the number of times a homeowner could transfer their assessment to any of California's 58 counties.

For more information, please contact me!

Average Selling Prices in Long Beach, Cerritos, Lakewood, and Local Counties, October 2017

Prices are varying according to area, and here's what they look like locally.
For a single family detached home, the average prices for the cities and counties below range from $364,271 to $1,052,322.

Overall the Los Angeles County average price for single family home is $903,618, a decrease from the previous month of $925,566, and even lower from July 2017.

All these prices are for the month of October, 2017, based on data from CRMLS.

Long Beach saw an average price decrease, and Orange County is still up slightly from July 2017, while Los Angeles County as a whole is still decreased from the high of $955,973 in July.  San Bernardino County's averages in September and October are now over $360,000, the highest point in the last 5 years.

October 2017

Long Beach
$646,002 | +5.3%

Lakewood
$558,111 | +1.8%

Cerritos
$795,732 | +17.9%

Los Angeles County
$903,618 | +3.9%

San Bernardino County
$364,271 | +6.9%

Orange County
$1,052,322 | +9.6%

These statistics show a mix of pricing, with Long Beach/Lakewood and Cerritos having less than 43 days on the market on average, approximately 2 months inventory, and closing prices continuing within 1%-2% of original price.

Keeping an eye on things

For an online and automated home valuation, try my site at http://www.juliahuntsman.com/home-evaluation.  It probably works more accurately for single family homes than condos in some areas, depending on what properties lie within about a one-mile radius.  Try it!  And I am always happy to do a more customized report to send out via e-mail.  If you're thinking about making a move, do it! It pays to keep an eye on things.

Goodbye Income Tax Deductions

Where do you fit in to the Administration's tax plan?

Halloween Scary Story

I was in an older historic neighborhood in Orange County, and wanted to do an impulse preview of a large two-story Victorian home built in the 1890s and located on a corner, with a for sale sign on the front lawn. It really piqued my curiosity.  I called the number on the sign and the front desk person for the company said it was available and I could go direct as it was vacant. 

 

I let myself in on the lockbox on the front door, and started to look around in the living room area when I heard a sound.  It sounded like heavier footsteps upstairs as if someone heard me and got up out of a chair and started walking away.  I immediately thought that there must be someone staying there occasionally and I had walked in on them.  I took a few steps up the stairs and called out "Hello", no one responded.  So I called out "Hello" again.  Then I heard more footsteps going to another part of the second story and the distinct sound of a metal window or door latch, as if it were closed quickly.  Suddenly, I was overcome with a cold chill and, in all the years I have entered vacant properties by myself, I have never ever felt in such a huge panicked rush to exit a property.  I couldn't find the door key fast enough, get outside and slam the key back into the lockbox. I  ran from the front door to the sidewalk, where I became more rational.  I thought there must have been an open window somewhere and I was hearing noises from a neighboring house, or there were unauthorized people sleeping there who heard me and left quickly.  I walked all around looking for outside exit stairs from the top floor, open windows, any sign of someone who could have been inside the house.  There were no stairs, and no sign of any open windows.

Since I wasn't sure what was going on, I decided I should notify the listing agent, so I called the listing office again and requested the agent's phone number.  I got the agent's assistant and said there might be somebody staying in the property.  He said he was coming right away and would be there in less than 15 minutes. I stayed outside in my car and watched the property, too chicken to move.  When he arrived, I let him go in first.  I followed him around downstairs and upstairs to check out everything in every room including closets.  There were no banging doors or open cabinets, no unlocked windows, no sign of anyone having been in the property.  He finally just turned to me and said that, similar to another listing he had one time, this just might be another ghost disclosure property!

(And seriously, if you think the neighbors are going to end up telling a buyer after the close all about the haunted house, it would be a good idea to relate the story to the buyer during escrow!)

Updated: The Ten Commandments of Buying a Home, Plus a Few More

Lenders are just not kidding around when they advise buyers about what to do for successful loan completion.  See the links below for my previous blog post on this subject, and in this post are more sage pieces of wisdom about how to have a best experience:

Always check with your lender, Realtor, and/or escrow officer personally on the phone, before sending a wire transfer to anyone.

Obtain complete documentation from your bank itemizing all money transfers.

Don't withdraw of deposit large sums into accounts unless absolutely necessary.

Try to avoid making career moves before close of escrow.

Don't allow your bank accounts to go negative, even if you have overdraft protection.

Don't apply for new credit.

All gift money must be documented, so avoid having a friend or relative pay for anything concerning the purchase of the home without first discussing with your lender.

If transferring money from overseas account, discuss the best time to do so with you lender.

Be aware if you close any credit card accounts, your debt ratio may appear higher, so DON'T close credit card accounts.  Just stop using them.

Avoid having your credit report run unless required by your lender of choice on a transaction.

More posts: Buyer Mistakes: https://longbeachrealestate.blogspot.com/2017/05/being-prepared-buyer-in-sellers-market.html
                    Wire Fraud:  https://longbeachrealestate.blogspot.com/2017/07/wire-fraud-in-real-estate-is.html

California Housing Market Forecast for 2018

The 2018 California Association of Realtors Housing Market Forecast was released at this month's annual trade show. 

As low housing supply and affordability constraints continue, the 2018 California market is expected to have a "nominal increase" over 2017, up to 4.2% increase in median price, and mortgage rates for 30 yr fixed rate mortgage going to 4.3%.

The proposed tax reforms under the Trump Administration are projected to lead to fewer sales, by 3.4%, accompanied by a decline in home values due to homeowner reluctance to put house on market as homeownership advantages disappear for homebuyers.  The housing supply could drop by 1.5% in the first year if this tax reform is implemented.

At the present, however, the California median price continues to rise, with the statewide median price at $565,330.  This is still not up to the overall market peak in May of 2007 of $594,230.  Orange County, however, has exceed that peak price by 1.8%, the only area in Southern California to do so.  In the Bay Area, five counties have exceed the peak 2007 price by as much as 42% (San Francisco). 
Housing inventory has declined everywhere, with the most inventory in the multi-million dollar market.  The California housing turnover rate is less than the U.S. rate for single family homes--longtime homeowners are staying put for reasons including capital gains hits, and "where can I afford to go"?  Another housing supply problem are the number of single family homes converted to rentals, in San Francisco estimated to be between 400,000 and 700,000 homes formerly owner occupied but now rented.

Housing affordability in California is now at 29%, and 28% for Los Angeles County, 21% for Orange County. 

• Median age for buyers - 45
• Median age for sellers - 57
• One-third of transactions sold above asking price, 6 out of 10 had multiple offers.
• The majority of first time and repeat buyers are in Southern California.
• Fewer international buyers, fewer buyers from China.
• Net cash gain to sellers highest since 2006.
• More sellers are moving out of California, but 38% are staying in the same county.
• List to sell ratio in Southern California at 98.9%.
• Lack of inventory considered one of the biggest challenges for the 2018 market, affordability another challenge.  Total sales are projected to be only 1% higher than 2017.

For the complete presentation pdf, go to http://www.juliahuntsman.com/market-trends-report.html, where, by the way, you can also search for your new home or get an estimated value report on your existing one.

A Tax Change in 1031 Exchanges Would Ultimately Affect Everyone

IRS Section 1031 Like-Kind Exchanges have existed since 1921 for the purpose of avoiding unfair taxation of ongoing investments in property, and to encourage active reinvestment in property.  While the most common image of doing a 1031 exchange is a transaction of selling one real estate property and exchanging into another real estate investment property, like-kind exchanges result in many types of property transactions. The exchanges are a stimulus to many sectors of the economy, i.e., not only for real estate professionals, but also contractors, title insurers, lenders, equipment dealers/manufacturers, transportation, energy and agriculture.  

The benefits of the current 1031 exchange allows for deferral of capital gains taxes on property sold when it is exchanged into "like-kind" property without cash being taken out (which would invalidate the exchange) and thereby allowing for new investment. Americans pay less for products and services because of this type of reinvestment on products such as single family and multiple family home rentals, public transportation fleets exchanged into new buses, trains, taxis, etc., airlines exchange their planes and rental cars--all of which dealt with through this 1031 exchange system which keeps costs lower for the consumer. Farm machinery, mining equipment, art collectible, boats, oil and gas equipment, and business asset trade-ins are all impacted by 1031 exchanges.

According to Fidelity National Finance Company, 

"The last major tax reform was in 1986. At that time, Congress repealed the ability to take passive tax losses in real estate.  An unintended consequence of this change was the ensuing real estate recession and the demise of the savings & loans industry. This eventually tipped the country into the recession of the early 90’s.  Section 1031 is bigger than passive losses. In some U.S. markets, real estate brokers claim that 1031 Exchanges touch at least 45% of the real estate investment transactions."

                                                                                * * *

"Ernst & Young, LLP released a macro-economic study on the impact of repealing or limiting 1031 exchanges in 2015 that quantified that the US economy would actually contract if Section 1031 was repealed or limited, finding that GDP would be reduced by approximately $8.1 billion per year."

Elimination, restriction or changes that would effectively block 1031 exchanges in any contemplated "tax reform" could negatively affect much of the current American economy.  The 1031 exchange is not only important on the large business economy scale, but is one of the few tools small business owners and small apartment owners have to maintain their capital investments over time.

 See more at these sites, which also include ways to contact your Congressional representative:
10 Reasons for a 1031 Exchange
Fidelity National Finance Company 
1031 Corp
Commercial Observer