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

JUST SOLD Just Listed: Long Beach Home at $599,000

 Update:  Sold on 9/3/2021 for $640,000.  CRMLS PW21127965

 

Now available

as of 7/12/2021.

This is a spacious single family home, contemporary style built in the 1960s, which is over 1400 sq ft on a lot about 4700 sq ft (not exact amount), with large 2-car attached garage with direct access into the house.  The interior and exterior have been completely repainted, and new vinyl flooring installed throughout, and other repairs have been made.  MLS PW21127965.

There are 3 bedrooms and 2 baths (each with tub shower), nice living room with large raised hearth fireplace, a kitchen updated with granite counters several years ago (exact date unknown), and a spacious bonus/family room with its own outside entry.  Rear yard is completely fenced, has mature trees.  

This home is a very nice opportunity for the size and space. It's also close to a public park, and within walking distance to public transportation and shopping along Atlantic Ave or Long Beach Blvd.

Please contact me for how to see this property, (and home is occupied), and contact me for further information on this property!

 

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

Appraisals Are a Large Reason for Delayed and Terminated Buyer/Seller Contracts

The National Association of Realtors June 21, 2021, Realtors Confidence Index Survey showed:

Problems encountered for a delay of contract closing were due to:

    1. Issues related to obtaining financing - 21%.

    2. Appraisal issues - 26%.

    3. Home inspection/environmental issues - 8%.

    4. Titling or deed issues - 11%

    5. Contingencies stated in the contract - 6%

    6. Issues in the buying/selling of distressed property - 2%

    7. Other - 26% (???) 

Problems in terminated contracts:

    1. Appraisal issues - 13%

    2. Issues related to obtaining financing - 7%

    3. Buyers lost job - 1%

Note that in both groups, appraisals were the largest issue, not unexpected in the huge and fast rise in home prices in the country as a whole.  Low appraisal values are sometimes overcome by the seller being willing to make an adjustment, the buyer having more money to put in, or a loan adjustment made when the buyer is already making a large down payment, or a switch to a different type of loan, or an increase in value when nearby properties justifying the price have just closed escrow.  If there is enough market data, an inperson appraiser visit may be waived and online data is viewed as satisfactory.  This doesn't always work though, and buyers and sellers must not assume that there won't be a problem with trying to close a price that is $100,000 over list. Agents really have to know their local market pricing to avoid an appraisal issue.

 

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

May Housing Report for California

May 2021 Sales and Price Report

The market up until May has been at a dead heat for the buyers, but has been showing signs of a little cooling as some buyers may be taking a break.  However, as the economy is now reopening, how the market may change is yet to be seen.  

The higher end of the market has surged:

"Robust demand of higher-priced properties contributed to the record-setting statewide median price. With million-dollar home sales surging more than 200 percent from May 2020, its market share is nearly double what it was a year ago when it was at 15.6 percent. More million-dollar properties were sold in the past couple of months than homes priced below $500,000."    

Overall, the Southern California market grew by 33.1% increase in median price (surveyed from 90 California MLS systems) compared to May 2020. This was second only to the San Francisco Bay Area.  The unsold inventory statewide still remains under 2 months supply (meaning it would take only 2 months to sell all properties at the current rate of sale--the traditional normal was 6 months before 2012).   49 out of 51 counties dipped more than 20 percent in the number of active listings  compared to one year ago, however active listings were at the highest level in the last 6 months.

The 30-year mortgage interest rate was under 3% in May compared to 3.23 percent average in May, 2020. 

The Los Angeles metro area median single family home price for May was $725,000, compared to $535,000 in May, 2020.

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

Reopening Guidelines for California Real Estate

 

As of June 15, 0pen house and property showing restrictions are mostly removed--
no physical distancing, no cleanings, no posted rules for entry, and happily, no PEAD forms (required before showing each and every property).  

But unless entrants are fully vaccinated, masks are still required indoors.  Additionally, sellers may impose their rules for property entry if they wish, i.e., require masks for everyone who enters.  

Door knocking and handing out flyers in the neighborhoods are once again permitted (unless of course one sees a sign to the contrary at the property).  See more information at California Dept of Public Health.

 

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

California April Sales and Prices, Higher Than Ever

 Inventory, Inventory, Inventory. There's less of it, and yet.... not everything is selling within 7 days. If you are interested in selling or buying and would like more in depth information about the current market in Southern California for residential properties, just contact me via phone or text. 

Why there are fewer homes on the market has more than one possible answer, but this shortage has grown since 2012, back when 6 months inventory was more the norm, not 1.6 months. 

Last September, Long Beach had 2 months supply of homes on the market, in April 2021 it was 1.1 months.  And this is the time of year when we traditionally see much higher inventory.  In the last 7 days, 79 homes and condos came on the market, but 77 closed in the same period, and 120 went into escrow.  So the new listings are not keeping up with the overall sold volume.  

To help the situation for some reluctant sellers, the passage of Proposition 19 can assist for certain age 55-and-over sellers, or disabled, or natural disaster victims, who want to minimize a change in their property taxes if they choose to move.   Or, if you plan on relocating, study in advance the areas that may be economic advantage to move to. And for certain sellers, a purchase with a reverse mortgage can be an option.  Selling first before buying is the most optimal for sellers, but if you  can't, you want to make sure that finding a new property is a #contingency in the contract with the buyer.

Buyers who are willing to accept a property that needs some work that fits in their budget may actually be able to find the right home.  Some of those properties have been sitting on the market for a while longer and without the fierce competition of multiple bids.  And feel free to use the property search tool on the site below.

 For more market information about your area of interest, please contact me via phone, text or email.

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

Buyers Feeling Squeezed in This Market, or "What is an Escalation Clause"?

With multiple offers, lowered inventory, and 15 minute showings, buyers have been under considerable competition and pressure so far in 2021.  In order to "weed out" the offers, sellers have been making certain requests, or buyers with several times losing out experiences have voluntarily been relinquishing their standard contingencies.  How?  By upping their offer price (even $100,000 over list price), shortening physical inspection time periods (i.e., 17 day to 10 days, or less), removing appraisal contingencies (putting their deposit at risk if they back out over a low appraisal), as examples.  

Another form of competition is an "escalation clause".   This is where the buyer offers, or the seller counter offers, to automatically increase the price by a certain amount, say $1,000, over any other offer. Of course, without any other language added, the buyer could be forced into paying $1,000 over another bidder offering $50,000 over list price--can the buyer really afford that? Well, what if the buyer puts in a "not to exceed" a certain price?  But now the seller know that buyer's maximum bid, and could use it as leverage to obtain higher amounts from other buyers.

If the buyer offers a "floor price" or $1,000 over the highest offer, the buyer may end up paying a higher price if no other offer matches the buyer's floor price.

To not blindly make offers using one of the above methods, the buyer should include language in their offer or counter offer that "the buyer  receive a copy of the highest offer (upon acceptance) and that the buyer has a right to contact that other buyer or their agent to verify that they made a bona fide offer," or words to that effect.

But California Association of Realtors cautions buyers about making offers with escalation clauses, stating that the enforceability of such offers is not 100% assured, and the buyer is advised to obtain legal advice prior to making such an offer.

For a the complete Guide, please contact me by phone or email.

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

A Strong Percentage of Homes Are Selling Above Asking Price

In January, 2021, over 56% of homes statewide sold over the asking price.  This is according to a Southern California April presentation by a California Association of Realtors economist as shown in the slides to the right.

The over-asking statistics may vary in areas, so for example, in a combined look at 180 sales of condos and houses between 4/8 and 4/15 in the 10 cities of Bellflower, Cypress, Harbor City, Long Beach, Carson, Torrance, Lakewood, Lomita, San Pedro, and Signal Hill*:

71% (approx.) or 127 homes out of 180 sold over asking.  

7% (approx.) or 12 homes sold at original list price.

19% (approx.) or 35 homes sold under original list price.

In lower prices starting at $300,000, the increase may be $900 to $15,000; in the $500,000 range the increase in closing price grew in some cases to over $50,000 higher, and in the $1,000,000+ category it may $150,000 higher.  However, one single family home listed in Long Beach for $595,000 recently closed at $700,000. 

For sellers such overbids may help them more easily into their next purchase, but for the huge number of first time buyers looking for opportunity with very low interest rates, there is much frustration. On many properties, multiple offers abound, often 15-20 offers from which the seller may pick, sometimes outright, sometimes countering back to a select group of buyers.

In a March 2021 Google Consumer poll, 64% of sellers thought it was a good time to  sell, while 28% of buyers thought it was a good time to buy. In 2020 however, 44% of buyers had more than a 20% down payment, and obviously many of them have the ability to bid some much higher prices to beat out the competition.  This leads to another issue:  appraisals.  Not all overbid prices are appraising, leading buyers to come up with more money, and how some are doing this is detailed in this article about the appraisal gap.

Who's not buying so much? Rental property investors, as COVID issues came to the frontline.

What will make the situation easier in the future?  Rising interest rates, more housing inventory, and an ongoing improving economy.
 

*as reported in CRMLS 

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

Housing Supply Stats for Los Angeles County, as of February 2021

LA County 2/21 Housing Supply

This graphic for Los Angeles County quickly shows a 27% decrease in listings compared to February of 2020.  This is a theme repeated over and over throughout other cities and the state. The top right bar graphs show in green where listings are this year compared to last year in red.  Last year's Time Trend show the huge dip as the pandemic conditions were being dealt with, and then an increase above the line  for 2021, but no where near the activity for 2020, shown in green bars. 

The pricing on Active Listings demonstrates the under-$200,000 market is very slim, with approximately one-third of the market priced between $300,000-$750,000, another (approximately) one-third between $1.0 million to $1.5 million, and the remaining third priced over $2,000,000.  All price ranges see a decrease in numbers of listings, but the largest deficit is in the lowest end of the market.

 

 

In the Home Price Interactive, the bottom right graph

Income vs. loan payment, LA County

shows how income has risen in Los Angeles County since before 2000, from $35,000 annually, up to the present $75,000 annual income.  But the payment line (green) has dipped up and down over time, reflecting the downtimes of the Great Recession and foreclosures after 2007, and  recovery period after that.  But according to this graph, the difference between current mortgage payment levels and annual income is at a midpoint, similar to the loan payment-annual income scenario prior to 2000.

 

 

 

 

 For a home valuation, please go to my website for an automated valuation, or contact me directly for a comparative market analysis.

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