July 29, 2020

Update on Coronavirus Market Impacts

Update on Coronavirus Market Impacts:

The CALIFORNIA ASSOCIATION OF REALTORS® released its June housing market report last week and it showed an unprecedented rebound in closed sales and the state also set a new all-time high price of more than $623,000. Additionally, the economy has enjoyed a variety of positive reports in the past week on interest rates and the labor market. And yet, even as we continue to make solid progress, some of our pre-crisis structural issues have reasserted themselves and the near-term economic uncertainty has increased significantly as well. 

 

Things continue to slowly improve, but it is clear that a full recovery is still a long way off.

California’s housing market recovers significant lost ground in June: After a record 41.4% decline in closed transactions in May 2020 due to coronavirus-related shelter in place orders, California saw the number of home sales rebound sharply in June. Home sales increased by more than 40% on a month to month basis. And although California is still below 2019 levels by 12.8%, it is a marked improvement from the sub-300,000 levels of April and May.

California’s unemployment falls amidst record job growth in June: California’s unemployment rate edged down from 16.4% in May to 14.9% in June as nonfarm payrolls swelled by more than 500,000. This marks the second consecutive monthly gain and means that California has already recovered nearly 700,000 of the roughly 2.6 million jobs lost in March and April.

More REALTORS® closed a transaction last week: The percentage of California REALTORS® that had a transaction close escrow last week increased slightly from 24% two weeks ago to 26% last week. Low rates have been translating into increased demand for home showings and a trend of rising mortgage applications since mid-April and although supply remains tight, California has seen many of those pending sales from April and May eventually close.

Pending sales increased for first time in 4 weeks: C.A.R.’s latest weekly analysis of MLS data across California reveals that pending sales increased for the first time in 4 weeks to an average of nearly 1,100 homes entering escrow per day last week. Prior to last week, home sales had been declining since late June. However, pending sales in California have now been above their pre-coronavirus levels for 11 weeks in a row.

Closed sales decline for first time in 10 weeks: Despite the solid June report on California’s housing market, the weekly MLS data shows that closed transactions declined for the first time since the week of May 9th. Previously, we have reported on flat or declining pending sales and this result is largely consistent with the slowdown in homes entering the escrow process we have observed over the past month.

Pending sales suggest a slow August: Although pending sales increased last week for the first time in nearly a month, the level of pending sales has been essentially flat for much of the past month. This suggests that although July may see closed sales shoot back into positive territory, more robust growth in August and September remains very much in question as the pace of new escrows subsides.

Inventory remains a significant challenge for California’s housing recovery: One key reason the recent rebound is losing momentum in recent weeks is that there is not enough inventory on the market for buyers to purchase. A myriad of indicators from jobs to spending to requests for home showings or new mortgage applications show that consumers continue to want to purchase a home, but the 43% decline in active listings across the state in June compared with last year have prevented many of these buyers from being able to do so.

More transactions are falling out of escrow, fewer members getting into escrow last week: The economy has made significant progress since mid-April, but a recent survey of California REALTORS® suggests that the recent increase in uncertainty has had a modest impact on their business. In the survey conducted over the weekend, the percentage of REALTORS® that had a transaction fall out of escrow during the week remained at 6%--slightly elevated from 5% three weeks ago. In addition, the percentage of respondents that entered escrow on a new transaction fell to 26% last week from 30% the previous week. This was the second consecutive decline.

Consumer sentiment declines in July as some businesses reclose: After recovering slightly in May and June, the University of Michigan’s preliminary estimate of consumer sentiment reversed course last week amidst re-shelter-in-place orders and general economic uncertainty. This is significant because consumer spending is still responsible for roughly 70% of the U.S. economy, which means a v-shaped recovery and much harder to achieve when consumers aren’t increasing their spending.

Last week was another week of contrasts: record job growth, record increases in home sales, new all-time high levels of home prices, and all-time low levels of interest rates contrasted against new closures in the state, rising initial claims for unemployment insurance, declining consumer confidence, and increasing difficulties in addressing the pandemic. It is hard to look at the data and not be optimistic about the progress we’ve made in the past three months, but it is equally hard to look ahead and not see increased economic uncertainty as well.

July 1, 2020

Everyone Is Working From Home — Here’s How to Do It Effectively

June 11, 2020

Add Value To Your Home With These Outdoor Improvements

 

 

 

 

 

 

 

 

June 11, 2020

Is Now the Time for a Luxury Market Resurgence?

 

 

 

 

 

 

 

 

June 4, 2020

7 Steps to Take Now to Prepare to Sell Post Quarantine

 

 

 

 

 

 

 

April 16, 2020

Message About Covid19: We Are Here To Help

 
Home sweet home. Handmade home symbol with heart shape on wooden background with copy space
We are here to help
I just want you to know that we are here to help.
Our hearts goes out to our families with children with schools shut down, our seniors in assisted living, our neighbors at the hospitals, our local businesses struggling and anyone impacted by this pandemic.
I've been selling real estate for 15 years here in Southern California. I'm fortunate to know people you may be able to help you out for a trip to the grocery store, watching children, or even getting bills paid.
You'll be surprised how many good people are happy to help you.
Call me, again, if you need anything. My number is 562-900-9430 . It does not need to be about real estate. It can be a personal issue. I'll see if I can assist in some way.
Of course, I've been asked, "How's the real estate market?"
Homes are still selling. Interest rates are super low and there are home buyers trying to take advantage on these low rates. We have increased the use of virtual tours and other tools to help buyers and sellers stay safe during the home buying process.
March 5, 2020

What Does Our Housing Shortage Mean for Buyers & Sellers?

 

There’s a housing shortage in our market, and it means we’re in for a strong summer.

The supply of homes for sale in the Greater Orange County and Los Angeles area is very low. In my 15 years as a Realtor, this is one of the lowest levels I’ve ever seen. 

Specifically, there are about 2.1 months of inventory. As a reminder, this means if no one else put their homes on the market, it would take 2.1 months to sell all available homes. To put this into perspective, there were about 3.5 months of inventory during this time of year in 2019 and 2018. We saw really strong appreciation in the summer months of both of those years. 

A “normal” market (i.e., one that’s balanced between buyers and sellers) has between five and six months of inventory. Anything below that mark is considered a seller’s market, so at 2.1 months of inventory, you can see that we’re deep into a seller’s market. There aren’t enough homes for sale for all the buyers out there.

“As we approach the spring and summer, this lack of inventory means prices will likely rise quite a bit.”

What does this mean for you? It means our market is in for a strong summer. The summer is when we typically see the most buyers enter the market—the weather is nicer, the days are longer, families want to get settled in before the school year starts, etc. In general, summer is when we see the most homes bought and sold. It’s also the season where we see the greatest increase in home values. 

The bottom line is that as we approach the spring and summer, this lack of inventory means prices will likely rise quite a bit. 

If you’re thinking of buying or selling soon, be sure to check out our website. There, you can search for homes or request an online home valuation. If you’d like to start looking at homes in person or would like a more exact calculation of your home’s worth, feel free to call or email me. I can put together a customized home search and discuss our strategies to find homes that aren’t on the market. 

As always, if you have any other real estate questions, feel free to reach out to me as well. Make it a great day!

March 5, 2020

What Property Owners Need To Know About Rent Control Exemptions

 

This is just a reminder for California property owners to send out your exemption notices to tenants if you want to remain exempt from rent control in California.

Tenant-occupied properties like single-family homes, condos, townhomes are exempt from the new California rent control law. Additionally, duplexes where one unit is owner-occupied and the other is tenant-occupied are exempt as long as one of the units remains owner-occupied.

“Many people aren’t aware of the full extent of this new law change.”

Regardless, in order for these properties that are supposed to be exempted from the rent control law to stay exempt, the property owner must give an exemption notice to the tenants or they could become subject to rent control, which details both limitations on how much you can raise rents as well as how you can terminate a tenant’s lease. For example, if the tenant has lived in the property for over 12 months, the owner can no longer terminate that lease without just cause under the rent control law.

Many people aren’t aware of the full extent of this new law change. If you’d like, I’d even be happy to send you a full copy of the law so you can look it over yourself. You can also watch me discuss this topic in more detail at www.SoCalRealEstateTips.com

In the meantime, don’t hesitate to reach out to me with any questions you have about rent control.

Feb. 12, 2020

Can You Install an Electric Charging System in Your Condo Parking Space?

In California, HOAs can’t unreasonably restrict condo owners from installing electric vehicle charging stations in their parking spaces.

If you’re thinking of buying a condo, can you install an electric vehicle charging system in your parking space after you’ve purchased the property?

In California, Civil Code §4745 says that an HOA can’t unreasonably restrict or prohibit a homeowner from installing an electric vehicle charging system in their designated garage or parking space (you’d still need to pay for the installation, however). 

This law also places time limits on how quickly the HOA must respond to your request to install the charging system. They have 60 days to either approve or disapprove of your request, although this time frame may be delayed by a reasonable request for additional information. 

“An HOA can’t unreasonably restrict or prohibit a homeowner from installing an electric vehicle charging system.”

In short, you absolutely can install an electric vehicle charging system, and HOAs are encouraged to act promptly to respond to your request. 

If you have more questions about this topic or you’d like help purchasing your condo, feel free to call or email me. I’d be happy to help.

Jan. 20, 2020

The Tenant Protection Act of 2019: What You Need to Know

Here’s how the Tenant Protection Act of 2019 applies to property owners.

How does the Tenant Protection Act of 2019 apply to property owners?

Essentially, this law limits the amount of money by which landlords can raise their rent each year. It also prevents property owners (with certain exceptions) from terminating a lease without ‘just cause,’ as the term is defined by the law. 

The annual rent cap is set at 5% plus inflation for a particular city. For example, if your city has an inflation rate of 2%, the maximum rent increase landlords can apply is 7%. Regardless of a city’s inflation rate, rent cannot be raised more than 10% per year. The rate of inflation is tied to the consumer price index for each metropolitan area (typically 2% to 3% per year). 

Keep in mind, this law does not override local rent control laws. Los Angeles, Santa Monica, and other cities throughout the state have their own rent control laws. Overall, this law applies to apartment buildings and multifamily buildings containing two or more units. This means single-family homes, condos, and townhomes are exempt as long as they’re not owned by a corporation, real estate investment trust, or limited liability company where one member is a corporation. It also exempts duplexes wherein one of the units is owner-occupied. 

“The Tenant Protection Act of 2019 limits the amount of money by which landlords can raise their rent each year.”

As I’ve said, even if a property is exempt by law, the burden is on the owner to send an exemption notice to their tenant. Otherwise, they may be subject to this law. In addition to the property types already mentioned, properties that were built within the past 15 years and vacant units are exempt as well. 

As far as terminating a lease goes, there are two types of just cause as defined under the law: an ‘at-fault just cause’ and a ‘no-fault just cause.’ An at-fault just cause is when a tenant fails to pay rent, has engaged in criminal activity, or breached a material term in the lease agreement. An example of a no-fault just cause is when the owner wants to move themselves or a family member into the home, remove it from the rental market altogether, or demolish it or perform substantial remodels. 

Some of the terms of this act are subject to judicial interpretation. For instance, it will be interesting to see how courts determine what’s considered “withdrawing a property from a rental market.”

If you’d like to know more about this law or receive a copy of the exemption notice, feel free to call or email my office. I’d love to help you.