Outlook: CA Housing Market
Two questions are looming about the 2013 real estate market in the L.A. area:
How high will prices rise? and...
Can we continue the frenzy?
The last three months of 2012 felt like the good ol' days...an honest to goodness frenzy. Listings had multiple offers in the first few days on market (nearly six out of ten sales or 57%). Buyers were out in droves; inventory was scarce (especially homes that were priced right) and property values were rising. Even the saturated foreclosure market was receding throughout CA.
Developers were snapping up property hoping for a quick profit after improvements. Sellers were happy to have a solid deal, but some Buyers were frustrated having missed out on several purchase quests when they did not step up to the plate. Delighted were Realtors� to be doing what we do best; making deals for Buyers and Sellers of real estate.
The supply and demand theory kicked in strong in 2012. Buyers realized the market had turned the corner in Los Angeles, and prices were not going down any further. Interest rates were still at fifty-year lows, and all cash Buyers were plentiful. Now! was time to buy in 2012.
However, even with the flurry of activity, the purchase prices in the L.A. market did not skyrocket. The difference in the 2012 frenzy is that many multiple offer transactions sold below the asking price. This was due, in part, because of the many "cash is king" transactions that offered quick closings and Sellers did not have to wait weeks for loan and appraisal contingency removals.
What will the new year bring to a still recovering real estate market? According to the CA Association of Realtors, C.A.R:
- Interest rates will remain historically low, about 4% for a 30-yr. fixed rate (4.5% in 2014)
- Median CA home price is expected to rise 5.7% in 2013 (developer flips will help to increase prices with remodeled homes)
- Total sale transactions, just about equal to 2012 or about 530,000
Other factors predicted by C.A.R.:
- CA unemployment to be 9.9% vs. 10.7% in 2012
- Real disposable income up 1.0%
- New home construction to rise, but still well below average...affecting jobs
National factors remaining:
- possible changes in mortgage deductions
- foreign investor appeal to U.S. housing market
- Unknown fallout from fiscal cliff, i.e. taxes
Let's hope L.A. continues its real estate rebound.
Did You Know?
Los Angeles-born Larry Miller, the famed mattress king of Sit 'n Sleep stated:a mattress doubles in weight over eight years...filled with (various) unmentionables.
Here are some of the more applicable new laws for property owners taking effect January 1, 2013, unless otherwise noted:
1. Pursuing Easement Owner for Maintenance Costs: Bill 1927
If an easement owner refuses, or fails after written demand, to pay for the proportional cost for maintaining the easement as required by law, the other easement owner can jointly or individually bring an action to recover the cost (or specific performance) before, during or after performing the maintenance work.
2. Reverse Mortgage Counseling in Person: Bill 2010
As a safeguard, a borrower seeking to obtain a reverse mortgage loan must now have an in-person interview with a HUD-approved counseling agency before a lender can accept a completed application.
3. Restricting Cancellation Fees for HOA Documents: Bill 1838
Any funds collected for HOA (Home Owner Association) sales disclosure documents must be refunded if a written cancellation request is sent and work has not been performed on the order. Also, a cancellation fee cannot be issued if:
- the requesting party issues a written cancellation, or...
- if the HOA was compensated for any work performed on the request.
4. New Smoke Alarms: Bill 1394
Owners of rented or leased properties are responsible for maintaining and testing smoke alarms throughout an apartment complex or other building. Apartment owners no longer need to have a smoke detector in common stairwells. As of January 1, 2014 rentals of single-family residences will require the owner to take responsibility of smoke detectors.
5. Seller's Notice to Tenant:
When an owner of an apartment building enters into a sales contract, a 30-day notice (generally 60-day) to terminate tenancy is sufficient as long six specific requirements are met.
6. Abandoned Personal Property: Bills 2521 and 2302
When a tenant terminates a lease and leaves behind personal property, the items must be sold at a public auction if a resale value is $700 or more. Also, a landlord can not assess a storage charge if the tenant reclaims the item(s) within two days of vacating the premises.
7. Default Disclosure: Bill 1191
Landlords of one-to-four units must disclose to a prospective tenant, in writing, that there is a Notice of Default pending before the lease agreement.
8. 90-Day Notice After Foreclosure: Bill 2610
A month-to-month tenant in possession of a rental housing unit at the time the property is foreclosed must be given a 90-day written notice to terminate.
10. Mobilehome Owner Protection: Bill 2150
New law provides that a mobilehome park must provide a homeowner who rents space with a specified annual notice of their rights and responsibilities.
11. Common Interest Development Act: Bill 805
The Davis-Stirling Common Interest Development Act that regulates condos and other planned developments has been comprehensively reorganized giving owners and volunteer board members a more user-friendly format.
12. Multi-language Foreclosure Notice: Bill 1599
A lender must provide a borrower with a summary of information attached to a copy of a Notice of Default and Notice of Sale for any one-to-four residential units in English, Spanish, Chinese, Tagalog, Vietnamese and Korean.
The previous Real Estate Newsletter stated the top ten Seller mistakes. Here are the top ten mistakes of home Buyers according to C.A.R.
(CA Association of Realtors)
1. Not realizing that if you don't write a strong offer to purchase, the Seller may reject or not respond to your offer.
2. Not realizing that if you don't write a strong offer to purchase, you may lose the property to another, more motivated, Buyer.
3. Not realizing that, without a confidentiality agreement, a Seller need not treat your offer as confidential.
4. Not understanding when a contract becomes legally binding.
5. Entering into an agreement before checking title records, liens and other things to ascertain whether the Seller will be able to close escrow as scheduled.
6. Not understanding the legal implications of loan and inspection contingencies, and other contractual provisions.
7. Not obtaining a Seller's disclosures.
8. Not conducting your own inspections and investigations as the Buyer.
9. Not fully considering the legal, tax, credit and other ramifications of home ownership, especially co-ownership.
10. Not properly handling a claim for property defects discovered after close of escrow.
It never ceases to amaze me, as primarily a Seller's agent, how often Buyers and their agents do not take the purchase agreement seriously.
They sign a legally binding contract then do not adhere to due dates, requirements to provide information or other matters.
Also, regarding mistake #1 above, when a Buyer is competing with multiple offers this adage strongly applies: you only have one chance
to make a good first impression. Make the offer stand out and remember there are two main points to a purchase contract; price and terms.
New Roof Deadline
All roof coverings in Beverly Hills must now meet Class A fire retardant standards by July 1, 2014, a one year extension. Approximately 217 of the 5,500 homes in B.H. still contain wood roofs, and replacement will be quite an expensive undertaking for longtime homeowners.Two decades ago the City enacted an ordinance requiring all new roofs to be fire retardant, or to have Class A roof assemblies. A dry climate, seasonal winds and topography make the City vulnerable to devastating brush fires. In 2007, a brush fire ripped through Franklin Canyon and sent flying embers to nest in the wood rooftops of three Beverly Hills homes causing significant damage. Following the fire, the City added specific requirements prohibiting any wood roof coverings. For more information call: (310) 281-2700 or log onto:www.beverlyhills.org/woodroofExcerpts from City Press Release 4/4/2012
|Winter Replaces Spring Cleaning
There is no time like the present to start removing the clutter and unused items from your home. Most of you
have lived in your home for 30-, 40- or 50+ years so this process is not going to be achieved overnight. If you plan to move this year, or not, here are some tips for clearing out:
- Offer family members their favorite treasures, now. Divesting some furniture pieces, heirlooms, collections,
sentimental or financially worthy items will bring joy to all. This will also ensure that your wishes are carried out.
- Tackle one room at a time: start in a room that is seldom used, begin cleaning out a closet or a desk.
Trick: never handle an item more than once during the process. Once you pick it up, decide and act accordingly: trash, donate, sell, relocate to someone or keep for personal use. Do not skip anything merely because it doesn't take up much room. Evaluate and bag everything.
- Removing papers: toss magazines older than the current month; newspapers more than a day. You can find everything you need on a Web site. Use a shredder for documents containing financial, account or personal information.
- What you do not need: duplicates, multiples, wrong size or worn-out clothes, party-size items if you no longer entertain, broken items, leftover hazardous waste materials and unfinished projects.
Conquering Clutter: Creating Space more tips are available, e-mail: [email protected]
Update: Beverly Hills
Two development projects along Little Santa Monica in Beverly Hills came to a screeching halt following the financial crisis in October 2008. The sites include the former properties of the Friar's Club and Robinson-May.
According to Rudy Cole, columnist for BH Weekly newspaper, the two "Gateway" projects have been resurrected and are in final studies, and plans are scheduled for City approval as early as this year. The owners of the former Friar's location, 9900 Santa Monica Avenue at Durant Dr., are attempting to acquire adjoining lots including the former Beverly Hills Y for a mixed use or condo project.
The former Robinson-May eight-acre site, 9900 Wilshire and Little Santa Monica, will retain the multi-building residential plan with some retail. Designed by renowned architect Richard Meier, plans still call for over 200 upscale condos plus retail. However, Cole indicates, another buyer may be in play for the site.
As you may recall this is the development site that was originally purchased in 2004 for $33.5 million by New Pacific Realty (NPR). Company CEO Arnold Rosenstein's son, Brian, is running for BH City Council in 2013. NPR then resold the site to two British developers, Candy & Candy in 2007 for a whopping $500 million. Following the global financial crash in 2008 their lender foreclosed on the loan and this same site resold again in 2010 for only $148.3 million to a Hong Kong-based private equity firm. The loss was a whopping $351.7 million.
Stay tuned as these two projects will be of interest to Buyers near and far.
Three of 15 in CA
The top 15 U.S. cities expected to see the greatest home price increase in the next five years include three CA areas. Noted is the percent increase (and the fall from the high):
Napa: up 8.0% (down 50.1%)
Santa Barabara-Santa Maria-Goleta: up 8.4% (down 52%)
Madera-Chowchilla: up 8.8% (down 52%)
Here are a few helpful tips to research about the association's finances when buying a condo:
- Insurance: make sure the association has adequate insurance coverage. Owners insure their possessions and the interior of the unit, while associations hold the policy on the structure. Not all buildings or complexes have earthquake insurance, so that it is not unusual either way.
- Reserves: check into an association's reserves, the amount of money set aside for known or unexpected major repairs. During the escrow period you will be given an extensive package of information from the condo management company. Time to review and approve the information is a contingency, and should be done so carefully within the time limit. Also, inquire about pending assessments, which should be disclosed, but may not be known by the Seller.
- Grounds: some associations have reduced landscaping services in the tight economy. If the grounds are not well-maintained, the value of a condo is likely to diminish over time.
Life-style Home Search
There is a new way to buy a home by first searching for an area that fits your ideal life-style, then finding your ideal home in that area. Coldwell Banker is pioneering a Web site for Buyers who are not familiar with a relocation area.
"Best Places to Live" is an exclusive arrangement with Onboard Informatics whose search engine begins with five life-style categories: Social Seekers; Leisure Lovers; Suburbanites; Culture Cravers; and Adventurers. The results shed light on communities, towns and cities that are rated best in each category, nationally and by state. Area demographics and statistics are available too.
Destination searches offer a human-centered approach to house hunting. Buyers decide what is important, be it cultural activities, mountains/ocean, transportation, golf, health services, etc. The next step is to find an ideal home within that ideal location.
If you are thinking about a second home, a move closer to your children or to another CA county where you can transfer your low property tax this is an ideal way to begin. Call me for a discussion about an area you do not know well.
|Excerpts from L.A. Times article
When it comes time to face the fact that daily living tasks are becoming difficult, the myriad of choices from in-home care to moving to an assisted-living residence or to a smaller home can be overwhelming. Very often a Senior finds that being cared for can make them more active and feel more secure. Here are some thoughts:
- Frank discussion: set up a meeting with family members or someone who knows you well. Be clear about goals and desires of remaining independent and staying at home, if possible.
- Medical assessment: a discussion and complete exam with a physician to determine physical and mental abilities or lack thereof.
- In-home care: there are plenty of service providers to interview. The issues may be the expense of 24-hour care; the potential liability for in-home accidents and little to no social interaction.
- Downsizing or simplifying:
sometimes there is just a need to do away with home upkeep and maintenance. When considering a simpler lifestyle, think of future needs. A rental apartment is less costly and maintenance is handled by someone else. Or, a one-story condo with security and amenities may be preferred.
- Minimal care: an assisted- living residence offers a myriad of benefits including: 24-hour care; amenities designed for Senior safety; supervised medication delivery; prepared menus by dietitians; organized and social outings; transportation services and the ability to remain independent.
- Research: it is essential to research, then draw your own conclusion. Search online for residences in your area or wherever you want to relocate. Ask a family member or a friend to first visit a residence to see if it is appropriate. Be sure to have lunch or dinner at the location before deciding.
SRES: call Realtor Radom, a
Seniors Real Estate Specialist who for twenty years has been helping longtime homeowners and their family members make transition decisions.
Cynthia (310) 288-0479.
2012...Best Year Ever
Thank you for helping to make 2012 my best year ever in 19+ years as a Realtor�.
|If you prefer the "Real Estate Newsletter" mailed to you, please e-mail: [email protected]
|Respecting your privacy and confidentiality, names and e-mails will only be used for providing pertinent material by Cynthia S. Radom and will not be shared with any other organization.
�2013 Coldwell Banker Real Estate LLC. Coldwell Banker� is a registered trademark licensed to Coldwell Banker Real Estate LLC. An Equal Opportunity Company. Equal Housing Opportunity. Owned By a Subsidiary of NRT LLC. This is not intended as a solicitation if your property is already listed.