Profile of Home Sellers in 2021 - How Did They Sell a Home?

The 2021 Profile of Homebuyers and Sellers is the 40th anniversary of the first National Association of Realtors report. The 2021 report is unusual because it is the first full year in which buyers and sellers purchased or sold during the COVID-19 pandemic, in what turned out to be a record setting year.

Long Beach Spanish bungalow

As discussed in the buyer post, this was based on a survey of homesellers' experience.

The median stay in a home in 1985 was just five years, in 2021 the tenure in a home decreased to eight years (from previous year high of ten years).  (This is based on national data, some areas such as Southern California have been more than 8 and 10 years).  Tightened inventory saw sellers getting 100% of their asking price (and more) in one week or less.  Nationally, the median home equity at time of sale was $85,000 in 2021, compared to $66,000 in 2020, a significant increase.

• The typical homeseller age was 56.
• Of all homes sold, 69 percent did not have children under 18 residing in the home. 
• Eight-nine percent of sellers identified as White or Caucasian, 
• The share of first time homesellers was 32 percent, and only 6 percent of all sellers did not plan to sell the previous home.
• Thirty-eight percent of the homes sold in 2021 were located in the South region, 24 percent were in the Midwest region, 22 percent were in the West region, and 15 percent were
  in the Northeast.
• The majority of homes sold were single family homes (78 percent).
• Forty-six percent of sellers traded up to a larger size home, and a majority of sellers purchased a home in the same state.
• The over 65 age range downsized to a home 100 square feet smaller.
• Buyers (former sellers) in the 35-44 age group bought the most expensive trade-ups by an increase of $101,000.
• Sellers said they wanted to move closer to family, especially those who moved the greatest distance.

• 

  Time on Market - Sales vs. List Price

  
  

  Ninety percent of all sellers worked with a real estate agent, while FSBO sales were below the historic norm at 7 percent.
• Less than 1 percent of sellers used an iBuyer program to sell their home.
• Ninety-six percent of sellers working with an agent did not know the buyer.
• Across all regions, the final sales price was a median 100 percent of the final listing price, the highest recorded median since 2002.
  
• Sellers in home 21+ years had 162 percent equity.
• Client referrals and repeat business were the ways seller found their real estate agent.

For a more extensive review of selling and marketing your home, please contact me -- I'm a broker with more than 25 years in the real estate business of helping buyers and sellers.

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

Profile of Homebuyers in 2021: How Did They Buy a Home?

Buyers in 1981 vs. 2021

The 2021 Profile of Homebuyers and Sellers is the 40th anniversary of the first National Association of Realtors report. The 2021 report is unusual because it is the first full year in which buyers and sellers purchased or sold during the COVID-19 pandemic, in what turned out to be a record setting year.

Based on data collected nationwide between July 2020 and June 2021, the survey consisted of 129 questions via paper or online in both English and Spanish.  Consumer names were obtained from Experian which maintains an extensive database of recent homebuyers derived from county records (which are public). The entire report is 164 pages with multiple graphics covering aspects of buyers and sellers experiences, and information about working with their agents. 

This post will be about the buyer experience section, and will primarily be hitting the highlights. 

First time homebuyers grew to 34 percent, greatly helped by the low interest rates but then challenged by a housing market with lowered inventory, rising prices and much competition from other buyers. Buyers reported the most difficult task was finding the right home to purchase, and the time spent in a home search was only eight weeks.  Eight-eight percent (88%) of buyers used a real estate agent to help them purchase.  

The typical first time buyer was 33 years old, repeat buyers were up to an all time high of 56 years.  Sixty percent were married couples, 19 percent were single females, nine percent single males, and nine percent unmarried couples. The largest share of buyers were in the 25 to 34 age group, and the median income was $102,000,

First Step in Homebuying for all Buyers

 

The majority of buyers either began their search online or contacted a real estate agent as a first step in the home search. Few people read books about the homebuying process or attended a home buying seminar--even visiting open houses was lower in activity as an initial step in  the home search.

 

 

Information sources used in home search

For information, all age groups primarily turned to an agent and then to an internet device , and then visited open houses.

But where the buyer found the home they actually purchased was on the internet for 51% of buyers, through their agent for 28% of buyers, with much smaller percentages for yard signs, personal contacts, homebuilders or the sellers themselves.  This is a complete contract to 2001 when 8% of buyers found their home on the internet and 48% through their agent.

This is only a partial representation of buyer characteristics in the Report for 2021, for a complete copy of this study, please contact me via phone or email. 

And for help in buying a home, I can work with you with my 25+ years of experience.

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

Why Shouldn't the Buyer Write a "Buyer Love Letter" to the Seller?

Fair housing issues are coming to the forefront of the real estate profession and being addressed at all national, state and local levels of the industry for REALTORS.  Problems with race, color, ancestry, gender, marital status, military affiliation, plus other groups of the legally protected classes continue to exist for many buyers and sellers in real estate transactions. Even appraisals have come under review.

One of the mechanisms by which discrimination may arise has been called the "buyer love letter" -- it arrives with the buyers' offer to a seller because it has been traditionally thought to help positively influence the seller into accepting an offer. They are often accompanied with photos, background stories about the buyer, and other personal history disclosed willingly by buyers who want to appear sympathetic to the seller, people who would love their new home just as much as the seller has, all designed to create a connection in order to get chosen for the contract.

This tactic has been addressed in the past, yet agents and their clients continue to submit such letters.  In one state, it is now outlawed.  In California they are not illegal, but agents are cautioned to advise their clients of the negative potential of this practice.  If a buyer insists on submitting such a letter, they are advised to eliminate personal information (but that's what some people hope will gain traction with the seller).  

Buyer Interest Letters, as they are official referred to, are considered a legal risk for unconscious or implicit bias. The buyer cannot really know what is in the seller's mind or background, and sometimes the seller doesn't either until the selection time comes, or the seller may not consciously be aware of their reasons for certain choices. Photos meant to present the buyer in a positive light may instead do the opposite, or personal buyer stories such as "I grew up in the neighborhood", "I have kids", or "my church is nearby" may elicit a negative reaction from the seller, or a favorable reaction towards a buyer but which excludes other buyers who do not have kids, a church or grew up in another state and thus cannot make any of those claims, and which in fact may violate one of the federal or state protected classes mentioned above.  So this is where Fair Housing issues come into the transaction.

The only information that I advise my clients to submit with an offer is the financial qualification dealing with price and terms of the offer, which in fact is required in the contract terms anyway, because the ability and motivation to buy are the actual buyer requirements. I do not advise my buyers to write any other personal information, and in fact, the seller may have actually instructed his/her agent to not accept any offers accompanied by a Buyer Interest Letter.

So please be aware that while a listing agent must notify the seller of all offers received, per California Association of Realtors: 

 "Even if the agent is following the seller’s instruction, the agent should disclose to the seller that an offer was received with a buyer letter and returned to buyer or agent per the seller’s instruction. Paragraph 10C(2)(A) of the C.A.R. Residential Listing Agreement, C.A.R. Form RLA, contains a seller instruction not to present buyer letters.  Only if the alternate paragraph 10C(2)(B) is checked is broker authorized to present such letters."

By carefully considering potential Fair Housing guidance, the parties will not be subject to doubts about their participation in the contract process.

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

If You Are Over 55, Don't Forget About the California Proposition 19 Tax Transfer Benefits

Long Beach bungalow house

Are you a possible candidate for a Proposition 19 tax transfer?  California's Proposition 19 was passed in November of 2020 and made changes to property tax benefits for families, seniors, severely disabled persons, and victims of natural disaster throughout the state starting in 2021.  For a general summary of this tool, and examples of how homeowners can save, please go to Your Local Realtor Can Help You Save When Moving With a Prop 19 Tax Break. These current changes allow a homeowner who is over 55 years of age, severely and permanently disabled or whose home has been substantially damaged by wildfire or natural disaster to transfer the taxable value of their primary residence to:  

• A replacement primary residence
• Anywhere in the state
• Regardless of the value of the replacement primary residence (with adjustments if "greater" in value)
• Within two years of the sale
• Up to three times (but without limitation for those whose houses were destroyed by fire) 

As with many pieces of legislation, this bill in its original form needed clarification in order for County Assessors to properly implement it, a process that is still continuing.  While prior Propositions 60 and 90 (intracounty and intercounty legislation) had certain limitations which the new Proposition 19 has expanded upon, Prop. 19 has also had some restrictions in place that didn't exist before, and it's important for owners to understand how it will work for them.

In general though, this bill is very useful, especially considering the overall cost of living in California in residential real estate prices, in allowing property tax base transfer reductions for homeowners over age 55, and other applicable owner categories, which will save money on the property tax of the new home purchase.  And, it may be applied up to three times for standard 55+ owners, but has no such transfer limitation where homes were destroyed by fire.

If you are considering moving now or in the future, please obtain more information from your Realtor professional and/or tax person about this tax transfer process.  Be aware also that at this time many County Assessors offices are dealing with many applications and homeowners are having to be patient.  If you are in Los Angeles County, go to assessor.lacounty.gov/prop19 for more direct information, and a forms tab to submit for your application. 

I am available by phone, text or email -- if you would like additional more specific information in a Q&A format, please contact me about this or any other aspect of selling a home.

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

Are New California Homeowners Prepared for Home Maintenance Costs?

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

1920s Spanish bungalow

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

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

1. Age of home

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

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

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

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

6. Gutter cleaning (clogged gutters cause water issues)

7. Fences (wooden ones degrade)

8. Landscaping maintenance 

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

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

How to budget for these costs on a general basis?  

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

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

Long Beach Residential Unit Market

Did you know ...?

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

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

Belmont Shore units

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

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

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

 

Unit sold prices in Long Beach

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

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

 *Information from CRMLS.                    

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

Long Beach Condominium Market--More Affordable for Many Buyers

 

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

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

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

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

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

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

Who Wants to Buy a House? Millennials Do Too.

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

 View from porch of home

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

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

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

See the 60 Minutes video .  

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

Open House in El Dorado Park Estates, Long Beach

3400 Julian Ave.

SOLD - 

 

MARCH 12 AND 13 -- 12 PM TO 4 PM.

3400 JULIAN AVE, LONG BEACH 90808

Beautiful  two-story corner lot home with numerous upgrades. Large five bedroom, three bath home with an additional 300 sq. ft. of permitted enclosed patio.  On the lower level is one bedroom and adjacent bathroom, which could also be a den/office/TV room; a carpeted living room with a fireplace, formal dining room; and a totally remodeled kitchen with granite countertops with a large island with cabinets. The kitchen has a garden window over the sink. Formal dining room overlooks the backyard. The family room opens to a covered patio with a wet bar. The living room opens to a permitted 300 sq. ft enclosed patio which could be used as a very large extra family room.  The upper level has a master suite with a fireplace, bathroom with dual sinks and granite countertops, and a jetted bathtub, plus three other bedrooms, one of which is converted into two walk-in closets by Closet World.   Extra-large two-car garage with storage cabinets, laundry in garage. Direct access to the garage from the family room. Crown moldings throughout the house and also recessed lights. Roof and solar systems  are fully paid for and are less than three years old. Rain Soft Water Softener System is installed in the garage area. Central Air/Heat, appliances, front sprinklers, laundry in garage.  COME SEE! Call open house broker for more information.

NOTE:  Sold---for all cash.

Living room

kitchen

 

Front entry hall

 

 

 

Family Room addition

 

 

 

 

 

 

 

 

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

 

MLS #PW21255218; Listing Brkr El Dorado Realty SoCal.

 

The Preliminary Title Report is a Must Read During Your Escrow

If you are in escrow for a California residential property that you're buying, and if you don't know it already, there are lots of documents to read, understand and sign--within a deadline no less.  It's a lot to comprehend at once, especially since, unless you have acquired properties within a recent one or two year span, you don't see these documents more than once every few years at the most, if ever.  Transaction confusion and anxiety can be at least partially reduced by building up familiarity with some basics in advance of actually being in escrow.

Temple Lofts

The Preliminary Title Report is one of those documents:  The entire purpose of it is to review conditions about a property in case there's anything discovered in an investigation of the public record which should be cleared ("exceptions") before the title policy is issued. 

Perhaps your experience has been routine in the past, so the entire report seemed like a "no brainer".  But what if something unexpected happens?  I remember the two buyers I once represented who especially wanted two gated parking spaces with their condo purchase, neither spouse wanted to park on the street.  The MLS listing clearly stated there were two parking spaces, and they obtained an accepted offer believing that's what they would have.  However, the legal description section on the preliminary title report (which they said they completely understood after receiving it) said something different, and my subsequent review and conversation with the title officer confirmed there was only one parking space.  It was several days of huge disappointment for the buyers--but they ultimately proceeded with the purchase because the condo otherwise met with their approval.   Condos in particular can run into these parking issues, so be sure to review your report if you're wanting a condominium, in this case it was the legal description that revealed the parking space.  

Schedule B - any exceptions included here need to be reviewed--they are matters that will not be covered by the title policy: pending court actions, private transfer fees which must be paid upon sale, judgments, tax liens, notice of default, trustee's sale, junior liens.  Unpaid property taxes, assessments and deed of trust are usual items to see on Schedule B as conditions to be removed prior to closing, unlike the previous items.

Forgery is a felony and unfortunately can happen to an unsuspecting property owner who may be the victim of someone attempting to transfer legal ownership without his/her knowledge. Title insurance protects against forgeries which may have occurred prior to the issuance of an owner's policy. Otherwise, an owner would have to bear the expense of resolving legal issues resulting from a forgery.

A requirement is to provide the title company with a statement of information (early in escrow, please!) which is used to discover matters which affect the interest of both the buyer and seller, i.e.,  judgments or tax liens in the public record.  If a buyer, for example, has an unpaid lien of $10,000 filed against her for medical bills, even though it has nothing to do with the subject property, this may affect her ability to obtain a mortgage and must  be paid off before the close of escrow.  

These are just some of the issues handled by the issuance of a "prelim" report -- having title insurance is not something that should be skipped in your property purchase.

If you would like a sample copy of a preliminary title report, please contact me with your email address. 

If you would like a market evaluation of your property, I will be happy to evaluate in person or online.

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