What is SB 9, Signed into law by Gov. Gavin Newsom on Sept. 17, 2021

A while back California passed a law allowing accessory dwelling units (ADUs) throughout the state as part of the work to alleviate a housing shortage.  There is now Senate Bill 9, the California Housing Opportunity and More Efficiency (HOME) Act, a law that will allow--disregarding neighborhood zoning--owners of single family homes to split their lots and build a duplex, effective January, 2022.

"The HOME Act facilitates the process for homeowners to build a duplex or split their current residential lot, expanding housing options for people of all incomes that will create more opportunities for homeowners to add units on their existing properties. It includes provisions to prevent the displacement of existing renters and protect historic districts, fire-prone areas and environmental quality."

Many have been concerned about the forced change to single family zoning, and potential negative results to neighborhoods.  According to The Terner Center in their July report on SB 9, "This ability to create duplexes and/or split the lot and convey new units with a distinct title would allow property owners to  pursue a wider range of financing options than are available for ADU construction to build these new homes." ....  "While Senate Bill 9 does not apply to single-family parcels in historic districts, fire hazard zones, and rural areas, local market prices and development costs play a large role in determining where there is financial viability for the addition of new homes. Moreover, physical constraints, such as small lot sizes and other local regulations, can limit the number of new homes built as a result of this bill."  Parcels most likely to benefit from this new law are those that are already "financially feasible" under existing law, and that relatively few single family parcels are expected to be financially feasible for added units as a result of this bill.  Mortgage products may be accelerated somewhat for parcels that are newly subdivided, for households able to take advantage of new homes of newly divided parcels.

As reported by The Terner Center, restrictions, which may put feasible properties statewide to about 410,000, of which about 110,000 would become newly feasible, include: 

1 Cannot be in a historic district or a historically designated property.

2 Lot split cannot be smaller than 40 percent of the original parcel.

3 A locality cannot impose any standards that would preclude the construction of up to two units or physically precluding either of the two units from being at least 800 square feet in floor area.

4 Side and rear setbacks of up to 4 feet is allowed.

5 The lot split cannot require the demolition or alteration of a housing unit currently serving moderate-, low- or very-low income household(s) or a rent-controlled unit.

6 The lot split cannot result in the demolition or alteration of housing that has been occupied by a tenant in the last three years or where an owner has used the Ellis Act to remove a rental unit from the market within the last 15 years. 

7 A jurisdiction may impose an owner-occupancy restriction for lot splits, where the applicant must intend to occupy one of the housing units as their principal residence for a minimum of one year from the date of the approval of the urban lot split.

8 No lot splits on adjacent lots. 

9 Cannot be created from a previous lot split. 

In Long Beach, the impact may be lessened because lot sizes are relatively small, which would preclude much of this from happening.  Officials say in order to make financial sense, lot sizes would have to be about 8,000 square feet.  Of the 59,803 single family lots in Long Beach, 4,609 are over 8,000 square feet.

 

For the complete report from The Terner Center, see their July 2021 report here.   

State law:  https://www.gov.ca.gov/2021/09/16/governor-newsom-signs-historic-legislation-to-boost-californias-housing-supply-and-fight-the-housing-crisis/

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

Rent Growth is Surging

Rents increase in 93% of metro areas

The national multifamily is surging ahead this year in many markets, over 10% to $1539 monthly rent nationwide.  August, according to Yardi Matrix's August report, showed year over year rent growth in 30 markets:  Phoenix leading at 22 percent, Tampa, Las Vegas, San Francisco at 1.4%.  

In August, seven gateway markets surpassed pre-pandamic levels, from March 2020:   Miami (16.2 percent), Boston (7.0 percent), Chicago (6.4 percent), Los Angeles (4.9 percent) and Washington, D.C. (3.9 percent).  The ApartmentList.com graphic, from an April presentation, shows increases in metro areas.

On a month-over-month basis from July 2021, Las Vegas, at 3.3 percent, with the Inland Empire and Seattle, at 3.1 percent, registered the largest increases.

Single family rentals, however, outpaces multifamily in the top 30 metro areas, especially in Florida and Texas metro areas. 

Long Beach

Locally, what are rents for residential properties?  For brand new housing, Holland Partners has recently opened Volta at 635 Pine where rents start at $2175 for a 1st floor studio under 500 sq. ft., on up to $4590 for a townhome style unit--there are 11 units in this project designated for affordable housing.  

Long Beach is a mix of neighborhoods and property styles, so if the apartment searcher opts for a wider variety, the REALTOR MLS reflects a range of different properties on the market for rent or lease, starting at $1395/month for a 500 sq.ft. unit on Pine Ave (downtown) to $15,000 for a house on Naples Island.   Average rent for units in a 4-plex or other apartment style unit is $2100/month; average rent for condominiums is $3000/month; average for a single family is $3477/month (excluding the outlier house for $15,000).  

Alternately, rents in Huntington Beach start at $1800 for 593 sq. ft. condo; Lakewood currently has 4 listings for tent (in the MLS), starting at $3000; Cerritos starts at $2195.  While the renter may find more listings on other internet sites, these prices will probably be very indicative of what is listed elsewhere.

There are many economic factors relating to the higher rents, but one major factor stands out, that consumers who did not lose their jobs during the 2020 pandemic months are still economically strong, while other workers in the food industry and retail were more affected, unfortunately, and will take longer to gain strength in the housing market.  The numbers of individuals who have returned to family homes is a topic for another day, but is also part of the renter picture.

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

Long Beach Residential Update for July, 2021

 

Median listing prices for active properties in Long Beach range from $425,000 to $1.4 million in July, 2021.   The least number of properties on the market are in the lower price range of under $500,000, most inventory is listed well over $600,000.  

About this graphic:  This graphic combines single family homes and condos into one median price point for the "active" properties for the month.  The median price is where half sold for more and half sold for less; medians are more typical than average prices.  The estimated monthly mortgage payment assumes a 30-year fixed-rate mortgage at the current interest rate. Payment also includes an assumption of 1.38% for property taxes and insurance.

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

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

Home in Alamitos Heights

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

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

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

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

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

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

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

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

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

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

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

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

 

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

The Issue of Buyer "Love Letters"

 

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

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

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

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

Long Beach Market Update for July, 2021

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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