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Newsletter Update - Aug 2017
As we wind down the summer months, the local real estate market continues to heat up. Typically after the Fourth of July the market slows down a little, but because buyers are so anxious to purchase, the few properties that hit the market are still selling quickly. I recently l listed a home that needed a lot of work (kind description) and it sat on a corner lot that was next to a fairly busy street. I received 10 offers on that property and it is in escrow $76,000 over asking price. Amazing! It just goes to show that owning property here in the South Bay is truly a blessing and it allows for some many other things to happen down the line. You can refinance and remodel, take out a reverse mortgage and stay in the home, or sell it at a high price and live comfortably just about anywhere else in the country. On the flip side it's a tough market for buyers as they are competing with so many other buyers and often find themselves outbid on most offers and "out financed" as many of these homes are being purchased all cash. You don't find too many kids of local homeowners able to buy in the same neighborhood where they grew up.
Newsletter Update - Dec 2016
The local real estate market mirrored much of what we saw in 2015 with low inventory being the one consistent factor. I don't see any real changes regarding inventory not only for this upcoming year but the following year as well. As predicted short term interest rates went up about three quarters of a point right after the election. For most buyers it wasn't significant in terms of monthly payments but critical in their qualifying, especially when they were just on the edge of qualifying. As an example on a one million dollar purchase with 20% down, with the old rate, that might have been their maximum borrowing power. With the current rates they now qualify for a home worth $925,000. Of course they can always choose to go with a 10/1 ARM as some buyers are now electing to do. They can sometimes qualify at the lower rate the ARM provides and if they know they won't be in the property long term this type of loan serves their needs.
Newsletter Update - Oct 2016
Home values in the South Bay started to settle after Labor Day, typical for this timeoftheyear. It has been quite a year again in the housing industry, especially in the South Bay. I will be including some really informative reports (Marketing Intelligence Report) that I think you will enjoy each month and quarterly so you can see what is going on real estate wise in the South Bay. Many of my customers love this site. Here is the link: http://issuu.com/remaxestateproperties/docs/sb_market_intelligence_rep ort?e=18704338/31140242
On the national level The Federal Reserve left interest rates unchanged recently, which Janet Yellen insisted wasn't because the central bank is downgrading its outlook on the economy. Quite the contrary,Fed Chair Yellen advises. "Our decision does not reflect a lack of confidence in the economy." The feds are now looking at December for any possible rate hikes, and I know, we have heard this so many times before, but I believe the election will finally tilt the feds hands.
Newsletter Update - Holidays 2015
It has been another good year for the local real estate market throughout the South Bay. Of course there are always ebbs and flows to the market, but for the most part it was a steady year of sales and refinancing. We have discussed the lack of inventory dynamic to exhaustion but certain areas of Torrance experienced an increase of inventory, especially in the fourth quarter. What that means for those areas is carryover inventory will be mixed with new listings in early 2016 creating some stagnancy in value until it reaches a more normal balance.
In early 2015 we saw quite a bit of movement with the Toyota Relocation to Plano, Texas. Employees that knew they were going took advantage of some high sale prices for their homes coupled with generous moving bonuses. I got to see some of the homes they were moving into in Texas and it was impressive to say the least. It has been sporadic in terms of future moves since Labor Day. Expectations were about 1400+ more relocation moves for next year and beyond but it has been a little slower than expected,someduetoemployeeslookingelsewheretostayinCalifornia, andalsothe time needed to build out the facilities in Texas.
Interest rates continued to be very steady throughout 2015 and although the threat of rate increases is still being discussed, I seriously doubt anything significant happens rate wise in 2016. Perhaps an eighth to a quarter percent uptick is expected in home loans but not enough to cause any panic. Look for rates in the high 3's and low 4's for purchase money and slightly higher for refinancing.
Newsletter Update - Feb 2015
I hope everyone's 2015 is off to a great start. The local real estate market here in Torrance started slow in terms of properties for sale but there are still plenty of buyers. It's a great time of year to put your home on the market because there is virtually no competition and buyers are ready to buy NOW! Interest rates have inched up just slightly but are bouncing around the 4% mark for jumbo financing and just below that for conforming loans. The economy is doing well, and the jobs market is stronger than the last few years, so sometime this year we may see a more significant uptick in rates. All predictions are for later in the summer months. I am starting to see properties listed outside of the South Bay stay on the market a little
longer and there have been some price reductions as well. This doesn't mean anything to us here in the South Bay but could indicate things to come. I remember, back in 2006, we were still going strong and places like San Diego and Orange County were already seeing a slowdown. I am going to continue to monitor those areas as I have listings in those counties as well. Additionally, from the networking group that I moderate, I am hearing about more and more off market investment properties being sold. Nearly 30% of the inventory we have shared this year is suddenly income property. What is odd is that these are cash out sellers and they not generating any 1031 exchanges.
Newsletter Update - Oct 2014
The market is starting to lose a little energy as pricing has been become moreafactorthenanytimethisyear. Valuesescalatedsoquicklyinthefirst 2 quarters that an adjustment was inevitable. I am seeing homes stay longer on the market, and price adjustments happening a little more frequentlyaswell. InterestratesremainlowandFedChairmanJanet Yellenmentionedlastweekthatratescouldremainlowfor a"considerable period of time". Educated guesses say sometime in the second quarter of nextyear. Rightnowconformingfixed30yearnotesareinthelow4'sand sub 30 year notes are in the mid 3's.
Qualifying for loans will become somewhat easier in 2015 as Fannie Mae and Freddie Mac will be switching to updated software using different filters. TheWashingtonbasedFinancialServicesCommitteeislookingat changes to people's FICO scores and assessing the damage done by delinquentmedicalbills,bankruptciesandshortsales. Theywillnotding your credit as hard for collection accounts, most specifically medical, as it is not representative of risks. Many people had their credit scores drastically affected by the downturn in the economy, and now adjustments will be made. Theyarealsolookingintostudentloansandhowchangescouldbe made their as well.
Newsletter Update - May 2014
Things are starting to change just slightly in the local market as we approach the summer months. Interest rates are still incredibly low and some of the Jumbo 7 year rates are below 3%. Imagine borrowing over a million dollars and for seven years your interest rate is under 3%. In most circumstances, high balance and conforming rates are in the mid 4% range. Having been in the business for 35 years, I remember the early 80's when interest rates were in the 16-17%. The slight differences in the market are the amount of offers being generated on newer listings. As I mentioned in last month's newsletter, I am seeing some multiple offers, but not as frequently and sometimes there is only one offer. Of course, it only takes one good offer to sell a property. Also, the big news is Toyota leaving their South Bay location and moving to Texas. Clients are asking me if this relocation will affect the local market and I really don't think it will. I remember when Nissan left and other tenants moved in and there was no ripple effect to values. I think if we continue to lose major corporations or if companies like Northrop, Raytheon, Boeing and the like follow suit then we will have major value issues.
Newsletter Update - February 2014
So far in 2014 much of the same dynamics that were in place throughout last year are still in place this year. In fact, I see even less inventory on the market now than this time last year. Pent up demand in 2013 combined with little inventory to sell created multiple offer situations on most properties that were listed on the MLS. Nearly 70% of all properties listed were sold with multiple offers. I don't expect that this year or should I say not as many offers will be generated on homes for sale in 2014. Where last year the average was around 5 offers per property, I can see that narrowing to two or three. Of course, this is on well-priced properties that have the data to support the value, not inflated values with no current comparables.
Newsletter Update - August & September 2013
As summer comes to an end the real estate market is starting to normalize. Interest rates that were in the mid to high s's are now in the mid to high 4's, making some buyers rethink their strategies and pricing out others. For most of the past year and a half it was a seller's market and now it is becoming more buyer friendly, still a seller's market but adjustments have been made. The market is a little less frenzied than the first six months of the year. Bidding wars seem to be ebbing as well. While there are still some properties that have multiple offers there are not as many offers as before. I did recently represent a buyer for a town home in Torrance and there were 16 offers on the property. My buyer did get the property and paid a little over asking price, competing with all cash offers as well.