Be careful when showing neighbors your converted Garage…you might get reported
I have recently been hearing quite a few stories of homeowners that have converted garages into living spaces being reported to the cities of Los Angeles and Santa Monica for non-conforming use. Neighbors can really frown on this so make sure you take this into consideration when showing off to neighbors, or when renting or selling your property. If caught by the city you may be cited for non-conforming use and the conversion would have to be removed and turned back into a garage.
By John SkinnerPartners Trust comprehensive 2nd quarter report
Here is the second quarter Los Angeles real estate market report for 2016. This quarter was marked by colossal milestones in sales amongst our team. We closed June sales at $318,205,953, a 48% increase over last June, and Q1 and Q2 closing at a combined $1,074,215,420, a 19% increase from last year. You will find detailed sales figures and trends within each major region of Los Angeles in the report. Average home sales price’s in the Los Angeles market increased 7.4% this quarter over last year.
Rents in LA are rising much faster than incomes
A report from Apartment List analyzed rental prices in Los Angeles between 1980 and 2014 and the city saw one of the largest disparities between income growth and rental increases in the nation. Rents have spiked 55%, while income levels have ticked up just 13%.
Other coastal cities, like New York and San Francisco, saw even higher rent spikes however incomes in these areas seemed to also swell significantly more than they did in Los Angeles. Putting Los Angeles in the company of Detroit and Indianapolis as one of the places where renters fortunes have deteriorated the most.
Source: Apartment List/Housing Wire
New Listing: Beautiful Charmer in Sunset Park (Santa Monica)- 2417 Hill Street Open Sunday May 15th 2-5pm List Price: $1.599M
Rare opportunity to purchase a wonderfully updated home on an expansive 7,000 sq. ft. lot on one of the most coveted streets in Sunset Park. This 3+2, 1,351 sq. ft. home features a remodeled kitchen with custom cabinets and granite countertops, two remodeled bathrooms, re-finished hardwood floors, central air and heat, fireplace, dual-pane windows and an automatic driveway gate leading to a full garage. Large park-like backyard and tremendous curb appeal with fenced front lawn surrounded by roses. One block from Clover Park and close to the hip restaurants and shops on Ocean Park. Come by and check it out on Sunday! Check out the property web-site for more details and photos: 2417 Hill Street
30-year mortgage rates fall to lowest levels in 3 years
Continuing the trend for most of the year, mortgage rates dropped again, falling to their lowest point in three years.
This marks the third consecutive week of declines. “Disappointing April employment data once again kept a lid on Treasury yields, which have struggled to stay above 1.8% since late March. As a result, the 30-year mortgage rate fell 4 basis points to 3.57%, a new low for 2016 and the lowest mark in 3 years,” said Sean Becketti, chief economist with Freddie Mac.
Prospective homebuyers will continue to take advantage of a falling rate environment that has seen mortgage rates drop in 14 of the previous 19 weeks.
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The 30-year fixed-rate mortgage averaged 3.57% for the week ending May 12, 2016, down from last week’s 3.61%. A year ago at this time, the 30-year FRM averaged 3.85%.
Also dropping, the 15-year FRM came in at 2.81%, falling from 2.86% last week. A year ago at this time, the 15-year FRM averaged 3.07%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.78%, decreasing from 2.80% a week ago. A year ago, the 5-year ARM averaged 2.89%. The chart below shows just how low mortgage rates are now.
Source: Housing Wire
Most real estate economists and professionals believe Westside/South Bay real estate will continue steady appreciation at least through 2017
The South Bay and Westside real estate markets are continuing to see an influx of buyers and investors despite many highly desirable areas being up over 40% in the past 4 years. A lack of inventory combined with low interest rates, foreign investment and a thriving white collar Los Angeles job market (Silicon Beach) will continue to drive market appreciation. Though we have seen a slight slow-down lately with buyers seeming to be a bit pickier and value conscious (especially above the $2M price point), multiple offers are the norm on properties that are listed at market value.
However, we would see a slow down and lose the positive momentum if the tech industry boom in Los Angeles starts to sputter. Some economic analysts are expressing concern that the tech sector could see a wave of lay-offs in the near future with venture capital funding more difficult to come by in 2016 and young companies not showing the profits that were expected. Despite this possibility looming, most economists that study Westside/South Bay real estate feel the market will stay in the seller’s favor in the foreseeable future and here are the reasons why:
Lack of Inventory– Homeowners are not in a hurry to move. According the California Association of Realtors, first-time homebuyers typically moved to another home within 5 years in the 1980’s and 90’s. Now, the average first-time homebuyers is staying in their property for 8-10 years. Many property owners see value in renovating their current home and keeping the lower property tax as opposed to buying a new home and seeing a dramatic property tax jump. The younger generation of homebuyers also witnessed the housing crisis from 2007-2010 and are a bit gun shy when it comes to pushing affordability on the homeownership front.
Interest Rates- Some economists believe the economy, especially the real estate sector, could not handle much of a jump in interest rates with society acclimating to low interest rates for a prolonged stretch. A jump in rates could paralyze the economy. Those that can afford homeownership are taking advantage of the low rates and with rents continuing to increase at break-neck speeds, the incentive to buy continues to stay strong. Though it is tougher to qualify for a loan, when you do qualify, banks are extremely competitive for the mortgage business. Real estate has proven to be a great long-term leveraged investment and being able to borrow at low rates drives those with money to acquire property. Despite a jump in rates over the past two weeks, rates for a 30 year fixed mortgage are still below where they ended in 2015 (3.64% vs. 3.86%).
Strong Los Angeles job market- With the continued growth of Silicon Beach (i.e.- google constructing a 12-acre campus in Playa Vista), high paying jobs are rolling into the area and unless a tech bubble develops, we don’t see this ending anytime soon. The Los Angeles County Economic Development Corp. released a report showing that the area has more high-tech jobs (368,600) than Boston-Cambridge, Santa Clara County and New York City. The direct high-tech workforce generated over $32 billion in wages back in 2013, accounting for 16.8% of all wages paid in L.A. County, the report said. Silicon Beach has continued to grow at a strong pace over the past two years and Google won’t open its campus for at least another year. The latest report from the LA Economic Development Corporation showed that Los Angeles County should continue to add jobs at a 1.7% annual rate this year and personal income is expected to grow by 4.4%.
Foreign Investment- Overseas investors have had a tremendous impact on the Westside/South Bay markets in the past four years feeling it was safer to put money into American real estate than invest in their own countries. Though the pace of that investing has slowed down over the past six months, it is still happening and will continue with programs like the EB-5 Visa. In its simplest form, the EB-5 visa program enables foreign investors to gain permanent residence status if they invest $1 million dollars in business development or $500,000 in a high un-employment area. Once this investment is made, they usually buy personal residences typically in an all-cash transaction. California is by far the most popular destination for EB-5 investors. The amount of EB-5 applications that are accepted every year is capped around 10,000, with 60,000 applicants awaiting processing. From a global perspective, Los Angeles real estate is considered a good buy when compared to other major cities and will continue to draw strong interest from the Pacific Rim and Canada.
IMPORTANT: City of Los Angeles revises draft of Baseline/Hillside Mansionization Ordinances…check out the changes and voice your feelings
Despite a strong initial push from some frustrated Los Angeles residents who want to curtail the building of larger homes in their neighborhoods, the city planning office has retreated from its initial draft released earlier this year. The loud objections and pleads from residents, developers and architects who felt the draft was extreme and ill-conceived were finally heard.
The initial draft of the Baseline Mansionization Ordinance “BMO” called for counting an attached garage as part of a home’s square footage and only allowing a home to be 45% of the lot size on lots under 7500 square feet and 40% on lots over 7500 sq. ft. In the new draft that was released in late April, these proposals have been scaled back to the original BMO which states a home’s square footage can be 50% of the lot size for lots under 7,500 sq. ft. and 45% on lots over 7500 sq. ft.
However, the new proposal does not allow for any of the 20% bonus that one can currently qualify for by following green building codes, etc., although some areas have already done away with the bonus by passing an interim control ordinance (ICO).
They have also addressed the scale/size of single family homes with the second story of the home only allowed to be 60% of the first floor and deeper side set-backs so it is important that Los Angeles residents familiarize themselves with this proposed ordinance and share your thoughts via e-mail with the city at neighborhoodconservation@lacity.org.
This proposal will impact the future value of your property and it is extremely important that you voice any concerns you have with this proposal before the end of May. Please click here for the revised draft.
Partners Trust report for the 1st quarter of 2016
While what is called buying season traditionally begins in spring across the country, it always starts a little early in Southern California where we don’t have to worry about the weather. This year, however, the season kicked off earlier than usual, leading us to have our busiest January ever.
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While we have seen some slowing at the high end of the market, most of the real estate market in Los Angeles is highly active and highly competitive. Recently Freddie Mac predicted that 2016 could be the best year for the real estate market during this decade. Sales, housing starts, and housing prices are all expected to rise, reaching their highest point since 2006. Mortgage rates are expected to remain low throughout the year and continued job growth may ease the afford ability crunch. The Fed has indicated that there will likely be two modest hikes in the interest rate in 2016 as inflation rises and the economic fundamentals remain solid, the Fed has not indicated yet when this year’s first hike will take place.
The biggest challenge that the real estate industry continues to face is low inventory. According to the California Association of Realtors®, the statewide inventory level hovers under the five-month mark (six months supply is the historical average). Partners Trust Associates continue to see strong competition for entry-level and move-up homes with multiple offers common. There is some slowing at the high-end of the market as homes over $6 million linger on the market. In the Bel Air/Holmby Hills area for example, sales were down -46.67% and prices fell -22.21%.
Neighborhoods where prices have continued to strongly increase include Los Feliz, where the average sold price is now $2,019,572, up 34.54%; Santa Monica where the average sold price is now $3,291,342 up 26.69%, year over year; the Beverly Hills Post Office area where the average sold price clocked in at $3,453,303, up 40.49%. Please note these numbers are somewhat inflated when comparing sales over a three month period. For example, more higher-end home sales may have sold in that particular time frame compared to last year. Comparing sales over a full calendar year provides the best perspective but these numbers provide a good indication of what is currently going on with the market.
Please visit our Market Stats section for this latest report.
Need parking for the Metro? 221 guaranteed spots up for grabs Sunday Morning!!
With the Metro Expo Line extending its service to Santa Monica beginning May 20th, a total of 221 Metro Expo Line parking spots will be up for sale Sunday morning, enabling early-morning commuters a guaranteed place to park at three Expo stations.
The passes will be available at Expo/Sepulveda, Expo/Bundy and 17th St/SMC as part of a 2-year pilot program that will be evaluated every three months.
The passes will allow access to spaces on a first-come, first-served basis from 4am to 9am, Monday through Friday. After 9am the spaces become available to all. An additional 239 spaces will also be available for a daily rate of $2 at the same stations, Metro announced Tuesday.
Expo parking: • 17th St/SMC: 67 spaces of which 13 are reserved for monthly permits. • Expo/Bundy: 217 spaces of which 131 are reserved for monthly permits. • Expo/Sepulveda: 260 spaces of which 77 are reserved for monthly permits.
A new walk-and-bike path parallels most of the Expo Line extension as well to facilitate reaching stations by foot or bicycle. Bicyclists will have the option to bring their bikes on trains or place them in bike racks or lockers at the new Expo station.
Due to limited parking at the new Expo stations, Metro encourages customers to consider walking, biking or taking the bus to reach the trains. To buy a spot head to lametroparking.net.
Source: Edited article from the Santa Monica Mirror
Designer to meet with residents about the Santa Monica Airport Park Expansion
Mark Rios, recently hired by the City of Santa Monica to design the 12-acre expansion of Airport Park at Santa Monica Airport, will give a talk to residents at a special meeting hosted by the Santa Monica Airport2Park Foundation, on Friday, May 13th, at 7:00 p.m., at Mount Olive Church, 1343 Ocean Park Boulevard, Santa Monica.
According to Neil Carrey, President of the Airport2Park Foundation, “The evening will be an opportunity for the community to hear from acclaimed designer Mark Rios about the parameters of the project for expanding Airport Park on land the City has reclaimed from aviation use, and Mr. Rios’ preliminary ideas for the possibilities there, as well as give feedback to Mr. Rios on what residents would like to see in the expanded park.”
Mr. Rios’ firm, Rios Clementi Hale (RCH), has been tasked by the City with community outreach, research feasibility and concept design, and ultimately design of the park expansion. RCH previously worked in Santa Monica on Euclid and Douglas Park and also designed iconic parks and public spaces in Southern California, such as Los Angeles Grand Park, the Rancho Cienega Recreation Center and the L.A. Zoo Event and Play Space.
The park expansion became possible in 2015 when the City’s 1984 Agreement with the Federal Aviation Administration expired, freeing up land that had been used to park airplanes, which have recently been removed.
Source: Article from Santa Monica Mirror
