Selling

Here in the Beach Cities, spring is in full bloom and there are signs of it all around us.

In real estate markets near and far, growth is abundant and it looks like it will continue that way for at least a bit!

According to National Mortgage Professional Magazine, “… Sky-high potential price gains may be finally prompting more homeowners to sell.” This is fantastic news for sellers and buyers alike. Movement increases inventory. Inventory increases a buyers choices. We all like choices! The unique and distinctive properties available on the market right now are not to be missed!

Read more by clicking HERE!

The California Association of Realtors released their report on California existing home sales and median prices in July. The statewide median price rose over the 12 months ending in July by 7.1% to $464,750. Although June marked the end of the 23 months of double-digit prices increases, the median single-family home price in California has now risen on a year-over-year basis for 29 months.

“Home prices continued to march higher across much of the U.S. in July. Most states are reaching price levels not seen since the boom year of 2006,” said Anand Nallathambi, president and CEO of CoreLogic. “Our data indicates that this trend will continue, with more states hitting new all-time peaks this year and into 2015 as the recovery continues.”

Please enjoy. Should your plans include real estate purchase and sales, please call or email with questions – and as always, thanks for your referrals!

Sources:

*LAEDC / Volume 18 N. 34

** HousingWire / Trey Garrison CoreLogic 9-2-14

For full source information, click >HERE<

According to the latest TrendGraphix reports for the beach cities for the period May 13th – July 13th compared to the same period last year you will see the number of properties for sale increased in Hermosa, Redondo and El Segundo however decreased slightly in Manhattan Beach. Although months of inventory have increased since the same time last year, we’re looking at approximately 1.9 months of available inventory for most of the beach cities including El Segundo.

Lawrence Yun, NAR chief economist, says the housing market is stabilizing, but ongoing challenges are impeding full sales potential. “Activity is notably higher than earlier this year as proces have moderated and inventory levels have improved,” he said. “However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates.”

Pending home sales in the West inched 0.2 percent in June to 95.7, but remains 16.7 percent below June 2013.

Please enjoy. Should your plans include real estate purchase and sales, please call or email with questions – and as always, thanks for your referrals!

* Sources: TrendGraphics, C.A.R.

One of the oddest things about this current housing market is the dwindling amount of supply.  For areas like Los Angeles and nationwide, total housing supply has been on a downward trajectory since 2010.  While an environment of rising home prices, less supply, and hungry buyers would lead you to believe that more home building would be occurring, not much of that has actually happened.Though the housing market is recovering nicely, it is not doing quite as well as some analysts had predicted. There has been no shortage of excuses offered as to why this is: the rise in interest rates, more stringent lending standards, the weather. However, we feel that there is one factor that is most responsible for curtailing the number of houses sold – the number of houses available for sale!

Inventory Levels are BELOW Historic Norms

In a recent economic forecast, Freddie Mac addressed this exact issue: “Including newly built homes in the inventory count, the total number of homes offered for sale relative to the number of households in the U.S. has been running at the lowest level in more than 30 years, as shown in the second exhibit. The relatively low for-sale inventory reflects several features of today’s market.” “A supply-constrained market (holding other factors constant) will result in a decline in the volume of sales and an increase in real transaction prices.”

NAR Report Confirms Inventory Constriction

History shows us that a balanced real estate market requires a six month supply of available housing inventory. The National Association of Realtors released their Existing Homes Sales Report last month. The report revealed that we are still only at a 5.5 month supply of homes for sale. We have not reached the 6 month mark in over two years. The recent increase in buyers now looking will again put a strain on this number. .

Bottom Line

While inventory levels remain below historic norms, it will remain a seller’s market. This being the case, if you are considering selling your home, now may be the time to list it for sale.

There is very little doubt that the real estate market is on much firmer ground that it was five years ago. Along the California coast, it’s not merely challenging to find reasonably priced real estate – it’s nearly impossible. Home values are rapidly rising and a confluence of factors will likely continue to drive the market even higher. Pent-up demand, job growth and still-slow mortgage rates continue to put pressure on home prices. The median price of a home in Los Angeles County rose by 5.9 percent in June, compared with the same month a year ago, while the number of homes sold dipped by 7.5 percent, a real estate information service announced today. According to DataQuick, the median price of a Los Angeles County home was $450,000 last month, up from $425,000 in June 2013. A total of 6,792 homes were sold in the county, down from 7,342 during the same month the previous year. In many markets price appreciation has slipped into the more sustainable single-digit range, compared with gains exceeding 20 percent this time last year. Home values are rrising and a confluence of factors will likely continue to drive the market even higher. Consider the following:

• Prop 13 – A voter initiative passed in 1978 amid an anti-tax revolt, it caps California property tax rates at 1.25% and freezes assessed property values at the original purchase price. While no one likes higher taxes, the measure artificially constrains inventory and make prices soar because it offers older homeowners a remarkable disincentive to sell.
• Greater investment property ownership – Investors flooded the middle market after real estate hit bottom during the financial crisis, gobbling up foreclosures and short sales at bargain basement prices and converting them into rentals – further squeezing what little affordable inventory exists within these markets.
• Lack of available land – In the most desirable neighborhoods within Los Angeles land is scarce. And when there is development in such neighborhoods, it often involves tearing down a $1 million home and replacing it with one that is three times more expensive.
• Foreign buyers inflating prices – From locating a property to negotiating price to going through each exhaustive step of the mortgage process, buying a home often takes months. But for wealthy foreign buyers seeking the safe haven of US-based hard assets, and making all-cash offers to sweeten their deals, it only takes weeks.  And by frequently going above market prices in their offers, foreign buyers have helped drive up the price for everyone else.