NEWS

Rents on the Westside are highest in the U.S.

VENICE
When it came to pricey rental markets, the Los Angeles area was always near the top (as New York City and San Francisco battled for #1 and #2). But the times they are a’changin’: A new report from rental website Apartment Guide says the very highest prices in the nation can be found right here in sunny SoCal. Specifically, Santa Monica leads the country with median monthly prices of $4,799 for a 1BR unit. That’s significantly higher than Manhattan, where median rents run $4,562mo for 1BR. Venice, which the report treats as a separate market from L.A. (even though it’s not its own city—yet), is 5th on the list, with median rents of $3,922.

Speaking of Venice, we JUST LISTED a charm-filled 2BR/2BA 900 sq.ft. home this week at 854 Superba Ave. (pictured) for $6,495mo. The reaction? Renters are throwing money at us.

Also on the Westside, Playa Vista and Marina del Rey place high on the website’s list (17 and 18), with median rents of $3,327 and $3,320, respectively. Other pricey hoods include West Hollywood ($3,180), Culver City ($3,161), and Hollywood ($3,110). The take-away? Stop paying someone else’s mortgage and contact us about buying a home!

House of the Rising Prices Pt. 2

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Our local spring selling season is reflective of the fact that U.S. home prices are on the rise as more buyers chase fewer available properties. 

Standard & Poor’s CoreLogic Case-Shiller national home price index (released this week) increased 5.8% in February, the most in 32 months. Some analysts say such strong price gains and slightly higher mortgage rates may eventually cool demand. For now, sales of new and existing homes are robust. March’s sales of existing homes reached their highest level in a decade. The strong market however, hasn’t enticed more Americans to sell their homes. The number of houses for sale has dropped to the lowest level in nearly 20 years, which makes finding one the toughest challenge awaiting potential buyers in this buying season.

Many homeowners have benefited from the sharp price gains of recent years, but those increases have also made it harder for them to trade-up to a bigger house, discouraging them from selling. Others have very low mortgage rates and may be reluctant to sell if doing so would force them to take on higher borrowing costs. Interesting times…

House of the Rising Prices Pt. 1

condo

We have currently got several condominiums in escrow, and are frequently asked a question that historically has had an easy answer: Do single-family detached homes appreciate in value faster than condos? The standard answer has been: Of course single-family homes appreciate faster. They are what most people prefer to live in, so there’s stronger demand. They come with their own piece of land—and land is a crucial driver of value. Condos, on the other hand, tend to be smaller and more complicated. They come with boards of directors, association fees, rules and restrictions.

But research out this week from Trulia suggests that these assumptions could be giving way to changing market trends. According to data on millions of properties in the U.S.’s largest metropolitan areas between 2012 and 2017, the median appreciation rates of condos outpaced those of single-family houses (SFR’s). Median condo market values rose 38.4% over the 5-year period, while median SFR’s appreciated 27.9%. In some local markets, especially those that have seen either significant new condo construction downtown (like Los Angeles) or that have little available land suitable for detached housing, the median value of condos exceeds median values of SFR’s in the surrounding suburbs.

Trulia’s analysis stems from their automated valuation model which estimates ongoing property values both for properties that are on the market and those that are not. For this reason, some take issue with Trulia’s conclusions. The National Assn. of Realtors (of which I’m a member) says based on closed sales prices—not automated estimates—SFR’s appreciated an average of 4.7% annually between 2010 and 2016, while condos averaged 3.4% per year. What to make of the new Trulia data? Clearly condos are playing a key role in some cities’ value and growth—specifically in L.A. ‘hoods like West Hollywood, Century City, and Santa Monica. In other markets around the country, condos continue to be more affordable than SFR’s and may be appreciating in value faster as a result. 

Latinos and the Market

18th Street

For the second year in a row, Hispanics were the only ethnic demographic that experienced an increase to their home ownership rate, according to new data from the National Association of Hispanic Real Estate Professionals (NAHREP).  In 2015, the Hispanic homeownership rate was 45.6 percent.  It is increased to 46 percent in 2016.  Hispanics also led in net household formations, adding a total new increase of 330,000 households, according to NAHREP. 

Overall homeownership rates in the U.S. are at their lowest levels in almost 50 years.  Hispanics have broken from this trend due to their high workforce participation and the fervent desire to own a home, according to NAHREP.  The group also cited initiative from major corporations focused on Hispanic homebuyers, and a sharp growth of Hispanic entrepreneurs in mortgage banking and the real estate brokerage business as helping to advance this growth. 

 “With credit remaining tight and limited housing inventory in several markets, these numbers ae extremely encouraging and a testament to the economic resilience of the Hispanic community,” said 2016 NAHREP President Joseph Nery.  “As the mortgage industry continues to recognize the exceptional opportunities in servie the Hispanic market and adjust accordingly, we expect these numbers to only improve.” 

 According to the Census Bureau data, the overall homeownership rate dropped from 63.7 percent in 2015 to 63.4 in 2016.  The African-American rate also dipped from 43.0 percent to 42.2 percent, and the Asian-American rate dropped from 56.5 percent to 55.5 percent. 

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