"Pocket Listings" Just Can't be Pocketed Anymore

The National Association of Realtors has just voted to ban this practice, a rule that is long in coming.

Called the "MLS Clear Cooperation" policy, it calls for all listings taken by Realtors for their sellers to be entered into their member MLS within one business day of marketing the property to the public.
The current rule, to be effective January 1, 2020 and implemented May 1, 2020, is as follows:

 Within one (1) business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is not limited to, flyers displayed in windows, yard signs, digital marketing on public facing websites, brokerage website displays (including IDX and VOW), digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public.  (MLS Statement 8.0, NAR Handbook on Multiple Listing Policy)

The implementation of this rule is considered to be in the consumer's best interest, which means his/her property is exposed on the multiple listing service to a broad audience of prospective buyers and their agents, rather than the creeping practice in many highly competitive markets of keeping listings restricted to certain groups, and not known to the general public. This practice is completely contrary to the entire purpose of the multiple listing services across the country which exists for broadcasting of available properties and brokers cooperating with each other on the buying and selling of bona fide listings.  This new rule does not mean at this point that a seller cannot take a listing and then get a little more time to prepare before allowing buyers to view their home, it does mean that the property may not be marketed as described above until it is placed into the MLS (multiple listing service) to which the Realtor belongs. Doing so actually gives the consumer the most exposure on the market. To illustrate, in San Francisco, the share of homes selling as pocket listings increased 68% between 2010 and 2018. By keeping properties off the open market, and thus fewer prospective buyers, sellers ran the risk of losing offers. 

The work and final submission of this new rule did not happen in a vacuum, there is a 130-person Multiple Listing Issues and Policies committee for consideration, and if approved, the proposal moves on to NAR’s 900 member board of directors for final ratification.



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

Another Interest Rate Cut to the Federal Funds Rate

What does it mean for home buyers and owners when the Federal Funds Rate is lowered?   (More information is on Investopedia about the Federal Funds Rate, which is what banks charge other banks.) This Funds rate doesn't directly impact mortgage rates, which are hard to predict and are more closely tied to mortgage-back securities and 10-year Treasury notes, but the Fed rate can impact adjustable rate mortgages and home equity lines of credit, and credit cards.

So in this larger picture are still historically low rates for home buyers, which means increased purchasing power because of the lower rates, refinancing to eliminate mortgage insurance or to get a lower rate, consolidating debt, or utilizing home equity to fund home renovation.  So if you were pre-approved 6 months ago, for example, but haven't made a move yet, go back to your loan officer to renew your buying potential, it may have improved!

If you are interested in selling to move up or move on, or looking to purchase a home, please contact me for more assistance!



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

California Association of Realtors Housing Market Forecast for 2020

Here is a summary of the 2020 California Association of Realtors Annual Report presented at the annual trade show in September, 2019 in Los Angeles:


Talk of recession:  Housing is not going to be the cause, but it could be due to global economics, trade wars, geo-political crisis, and/or stock market correction.  It could happen sometime in the future, there is no timetable.

According to a 2018/2019 Google Consumer Poll, 46% of 300 people thought it was a good time to sell.

According to CAR's 2019 Housing Survey, though, 47% of properties in escrow fell out because the buyer decided not to buy, the next highest number was 6% representing people who did not qualify for a mortgage on buyer's terms,  down to 1% for seller deciding not to sell.

Unemployment is at the lowest rate in 50 years, with Los Angeles County and Orange County at 4.5% or lower.
Interest rates are at historic lows, will remain lower in 2020, per this report.

Nonfarm job growth in California is lower than 2015, under 2%, unemployment lower than 2015, the population is almost 1 million higher than 2015, and population growth at .5% is lower than in 2015.
The highest sales volume is in the $500k to $749k range in California, with 46% of house sales taking place in Southern California, although sales growth in all regions is down compared to previous year.

The California median single family home price for existing homes was at an all time high in August of 2019, at $617,410.  The SFR inventory supply improved only at the upper end of the market, so prices over $1 million and $3 million increased 4.5% and 10.8%, respectively.   Houses under $299,000 decreased by 17.5%, with inventory decreases in price ranges all the way up to $999,000.

Overall, for the last 15 years California's sales are mostly flat, in spite of a strong economy, low interest rate, and low population growth.

Why?  Well, because fewer permits were issued :  in 1988 over 255,000 permits to build were issued, while in 2018, just over 114,000 permits were issued, while the population grew about 12 million in that time period.  Limited land, density resistance, project review delays are all possible contributors to this condition.

In spite of rates dropping, buyers mortgage applications are down, and the projection is that by 2025 California will be a majority renter state.  Los Angeles and Long Beach already fall into the 60% plus range for renters out of the total population.

The market is not as competitive as in previous years, less than half of sales received multiple offers, compared to 2013 when about 70% of listings received multiple offers. Outmigration to other states continues, 750,000 people have left since 2010, with San Bernardino and Riverside Counties being popular relocation spots, and there are fewer investor flippers in the market, and fewer investors are selling their properties.

Sellers are staying put, average time in a home is now 11 years, much longer than in 2005 when it was about 5 years in the home.

And so where are we in the end for 2020?  Here's the summary chart:  The California median price is predicted to be $607,000 for a single family home (statewide) with a 2.5% increase in price growth, far lower than 2017.

 

For the complete report in pdf format, you may download here: CAR Housing Report  by looking for the link to the report on my Market Trends Page.


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

California: 2019 Just Cause Eviction and Rent Cap Bill AB 1482

Studying new rental laws?

As of this date, this California state bill has not yet been signed by the Governor, but is expected to be since he has indicated his approval.
Bill signed in October, 2019.
Update: Long Beach rent ordinance rescinded by Council on Dec. 3rd, 2019.

Exemptions for Previously Existing Ordinances

This AB 1482 recognizes local ordinances, such as Long Beach Tenant Relocation Assistance (see link at bottom), passed prior to September 1, 2019 as follows:
Even if a local ordinance is less protective than the AB 1482, it will preempt the newer state law unless "more protective provisions" are passed to that local ordinance after September 1, 2019. If Long Beach or other cities were to do that, specific terms must be met.  "More protective" means:

"1. The local law must be 'consistent' with AB 1482. 2. The local law must provide higher relocation assistance or provide additional protections. 3. The local government has made a binding finding that their local ordinance is 'more protective.' "

 So if you're a Long Beach landlord or renter, check the link to the local ordinance below for complete coverage of its terms which went into effect August 1, 2019. Please note that OYOs and stock coops may be subject to rent caps and just cause under the new AB 1482, as noted below. Note:  Just cause under AB 1482 applies to tenants who have been continuously and lawfully occupying the property for 12 months or more. 

Otherwise, if you're in another city without its own ordinance, or unincorporated areas, you will probably need to look at the link to AB 1482.

AB 1482:
Goes into effect January 1, 2020.

Rent cap:  All rental increases since March 15, 2019 will count toward the cap of 5% plus inflation, or up to 10% total, whichever is lower.  See indexes for determining inflation https://www.bls.gov/regions/subjects/consumer-price-indexes.htm#CA  or this index if regional information not available for you  https://www.dir.ca.gov/OPRL/CPI/EntireCCPI.PDF.

Exemptions from the rent cap: 
Single family residences and condominiums, provided renter receives notice of the exemption (this may not include stock coops or OYOs, however and they may be subject to rent caps and just cause);
The owner is not a real estate investment trust, a corporation, or an LLC in which one member is a corporation;
Housing built issued a certificate of occupancy in last 15 years, generally meaning newer housing;
A duplex in which one unit is owner's primary residence;
Housing restricted by deed as low, low income housing;
Dormitories for higher education institutions;
Housing already subject to local rental control ordinance;
Section 8 rentals are likely exempt;
Exemption for just cause for ADUs, and an SFR that rents out up to 2 bedrooms in the house, or in which a tenant shares bathroom or kitchen facilities with the owner; 

Reasons for just cause eviction include: non payment of rent; breach of lease after given notice to correct violation; nuisance; unlawful use of property; damage to property; refusal to allow entry; when a tenant fails to vacate after giving notice of leaving; subletting property in violation of lease.

One month's rent must be paid to a tenant in the following circumstances including: withdrawal from rental market; demolition or substantial remodeling of property; government order to vacate; conversation of property to owner occupied.  Relocation assistance is not contingent on the renter's income amount.

Finally:
This post is NOT an exhaustive summary of these laws, so it is advisable for additional assistance to be consulted whether you are a landlord or a tenant.    However, I would be happy to provide the entire legal summary, as currently provided by the California Association of Realtors legal team, in pdf format, if you provide me with your contact information. It covers many questions and answers in great detail concerning AB 1482. 

For reference:  CA Bill 1482 , Long Beach Tenant Relocation Assistance Bill.

Finally, complete property search of both sold and active listings are available on my website at www.juliahuntsman.com, simply by looking in the dropdown list under "status"-- the following is a link to income property throughout Los Angeles County actively listed in the MLS:  Income properties.
Rental/for lease properties may also be searched on the site in the same way.
Please feel free to  contact me for help on finding a property!!
.
Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996

Average Selling Prices for August, 2019 in Long Beach,Lakewood, Cerritos, Huntington Beach and Three Counties

Alamitos Bay, Long Beach

All these prices are for the month of August, 2019, based on data from CRMLS Infosparks:

Average prices for single family homes in Orange County were showing a slow downward trend since early 2018 but shot upward in May of this year, while Los Angeles County is still trending up from $919,000 in December 2018, and San Bernardino County's average remains solid.
The average days on market for the four cities is about the same as in June.  However, in the very high end markets in Long Beach, properties over $1 million are now generally on the market longer than those under $1 million.  In comparison, prices for the 236 actively listed Long Beach houses under $1 million are currently at 49 average days on market at an average list price of $657,000.  More buyer opportunity in this range!

Luxury Market:

There are currently 87 active single family homes (as of 9/24) listed over $1,000,000 in Long Beach, the average days on market is currently 87; the average days on market for all single family sales over $1,000,000 in the last 6 months was 60 days for 149 properties. There are currently 34 properties in escrow, average of 99 days on market.  If you have a listing over $1,000,000, it might be taking a little longer to sell.
In comparison, in 2018, 241 single family homes sold over $1,000,000 in an average of 63 days.

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

August, 2019

Long Beach
$743,017 (down 1.2% from July)  Avg Days on Market : 36

Lakewood
$628,684 (up 3.1% from July)       Avg Days on Market : 22

Cerritos
$728,655                                        Avg Days on Market : 42

Huntington Beach
$1,014,446 (18 month high)          Avg Days on Market : 40

Los Angeles County
$966,765 (still down from a high in May, 2018)

San Bernardino County
$377,714

Orange County
$1,087,04

The above prices are for single family homes, please contact me for condo market prices!

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

A Little Random Data About the Long Beach Market in August 2019

As of August 26th, there were 299 active listings for single family homes in the MLS:

Smallest house for sale = 480 sq. ft.
Largest house for sale = 7692 sq. ft.
Lowest list price = $375,000
Highest List price = $11,995,000
Longest days on market = 525
Listings that mention a bomb shelter = 0
Listings that mention walk score = 4
Listings that mention a pool = 30
Listings that mention granite = 77
Listings that mention an ADU = 7

On occasion, there is a listing that describes a bomb shelter (a 1950s era feature); walk score has gotten a lot of talk in the past, but where is it now?; pools are very much in the market, but not desired by everyone; granite couinters hit the big time for over a decade, but may not be desired by all buyers who may decide other material, such as quartz, is more to their liking.  And ADUs (accessory dwelling units) were passed into law in California as an attempt to help ease the affordable housing crunch--if you are thinking of adding one, be sure to check in with the City's requirements first--the upside is they are good way to have a second legal unit without having to be in an R2 zone.

If you are interested in looking into a property with these characteristics (or without) and want to know more, just contact me!

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

How a Listing Went From $1 Billion to A Low, Low, Selling Price

This story could be the story of many sellers, albeit on an exaggerated scale.  How did a property on the market for $1 billion dollars ultimately sell for .1% of that, or a 99.99% loss?

It's the story of an investor buyer who wanted the 157 acre parcel in Beverly Hills, and to get it he borrowed $45 million from the seller (Mistake No. 1), the Mark Hughes Estate, and bought it in 2004.  In time, the debt surged to $200 million with interest and fees added. The investor transferred ownership to an LLC controlled by the investor's partner, which was unsuccessful last month in declaring bankruptcy.  The Hughes estate could either buy the property back, but lose the $200 million it was now owed, or let it go to foreclosure auction. But any other buyer purchasing prior to the foreclosure auction would have to pay the $200 million in debt, and there were no takers. So the property went back to the Hughes estate, after 15 years, leaving it to absorb the $200 million debt.  However, the LLC, known as Secured Capital, made a last minute offer of $150 million for the property, but the estate ignored the offer, according to the company's attorney (Mistake No. 2).  So last week, the property sold for $100,000 at auction. 

So 1) don't overprice your property; 2) or do a carryback loan to a buyer who can't perform, 3) and, finally, know when to cut your losses so you don't lose out completely (the estate could have at least recouped $150 million) and then, end up selling at a below market price that you can't even buy a condo for.  And last but not least, check your days on market, and keep checking your market value.


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

July 2019 Market Prices for Houses in Long Beach

No matter what is said about housing affordability up to this point, the house prices continue upward overall.

In January 2014, the average price of a single family home in Long Beach was just under $500,000. Following the peaks and valleys all along since then, the average price in July 2019 was $775,352, while the median (midway point of all SFR's sold) is $660,000, vs $455,000 in January 2014.

Days on Market:  July, 33 average days on market. This is time before an accepted offer, so what does this mean? You can't waiting around forever before making an offer.

List to Sold:  In the last 5 years, houses have sold in the range between 97% of list price to 100% of list price, with the July average at 98.6% of original list price.  So what does this mean? That you have to make your offers strong.

Months Supply:  This is the amount of inventory on the market before it would run out at the current rate of sale, and this has been ranging, since 2014, between 1.5 months and 3.5 months.  It's been a long time since the 6 month supply level, considered the market norm, has been around. So what this this mean? Limited supply helps drive prices up, less inventory,  continued demand.

Closed Sales:  Since 2014, this varied  between monthly lows of 102 and 106 SFR closings a month, to 259 a month.  In July, 212 single family homes sold.  What does this mean?  It's not unusual for low sales in January and more sales in the summer.  Since 2008, the highest number of sales were in August 2012 (260) and June 2017 (259).   Per data on the MLS, just to compare, going further back to January 2000, 183 SFRs were sold; in July of 2001, 350 SFRs were sold.  So our market volume has slowed consideredly since that time, and prices have gone up.

But buyers are still looking to buy, so if you are thinking about selling, even if you're not sure when, whether you have a house, condo, or unit properties, please contact me. I can work with trust and probate properties also!

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

It Just Got Easier to Buy and Sell Condos with FHA

Downtown Long Beach condo view

As I've previously posted,  condos haven't gotten a break from HUD for a long time.  Many HOAs, if not most, in Long Beach lost their FHA certification and didn't renew it.  It was once a permanent approval, but due to the 2009 and later mortgage fallouts, HUD required HOAs to renew their FHA loan approvals every two years.  For most Boards, that's a nano-second.  Plus, HUD removed the ability to get a "spot" approval, meaning a single unit could be approved for an FHA purchase, even if the rest of the HOA was not approved.

Finally, HUD is giving back.  Effective October 15, 2019, the new rules (click on the title link) will:

Extend the approval period from two to three years;
Allow for "spot" approvals, those single unit mortgage approvals, up to 20% (currently, none are allowed);
Allow additional flexibility in the ratio of investors to owner-occupants in the association, between 25-75% (currently, 50% owner occupancy required).

To give an idea of how this will help FHA buyers, nationally there are more than 8.7 million condo units, but only 17,792 FHA condo loans were originated in the last year, according to the National Association of Realtors.

These loans changes may also come under specific lenders' requirements, so who you work with on youir FHA loan may have an impact on what HOA may or may not be eligible.  However, since lenders want to make loans, there should be a lot of incentive to help a qualified buyer complete a condo purchase.
These new changes are very beneficial to condo sellers, who should find a buyer faster when not owning in an HOA-approved building.

If you are interested in finding out about a condo purchase, Please contact me.  I've been helping buyers and sellers since 1994!


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

Are You in Shock? Did Loan Forgiveness Affect Your Credit Score?

But not in a postive direction?

A consumer or borrower might think that getting rid of a loan would improve a credit score.  But the reality is that in spite of all the talk about helping students, for example, by helping them obtain cancellation of the school loans, just the opposite happened. In fact, I know of a non-student case where a borrower's second mortgage was voluntarily forgiven by the lender, but then that person went to obtain a new purchase mortgage loan approval to buy a second property, and their credit report now showed a foreclosure. And apparently, according to the New York Times, some student borrowers are finding that their loan servicers are reporting they are delinquent in loan payments,  rather than a debt forgiveness.  The next problem is that the loan servicers seem reluctant to correct these reporting errors, and thus the borrower's FICO score drops, and it may be enough to prevent obtaining a credit card, or a loan.

A mortgage borrower could notify the Consumer Financial Protection Bureau, assuming he/she has the documentation that the loan was cancelled. Also, a dispute concerning the reporting error could also be initiated through the credit bureaus. 



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