NEWS

National Sales Numbers Send Mixed Messages

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The good news for the economy is that housing prices throughout the U.S. remained strong in May, maintaining their steady growth. The CoreLogic national home price index released earlier this week showed a 6.4% gain from the same period last year. That is similar to the growth recorded in April year over year.

The bad news: Higher home prices are affecting the pace of sales, which is slowing around the country. New home sales reached an 8 month low in June, dropping by 5.3% from May, while existing home sales fell for the 3rd straight month.

In Los Angeles, where our need for affordable housing is at a critical stage, home prices were 7.6% higher than in May 2017. The number of sales in the same period dropped by just over 2% when compared with 2017. In Manhattan, the number of home sales dropped by 34.2% year over year in May. While home prices were higher than they were a year ago (4.2%), they’ve barely moved since March. In Miami, home sales dropped 2.3% from 2017’s numbers, but sales prices were up 5%.

 

 

Got plans to move somewhere hotter?

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Despite record-breaking temperatures outside, the Multiple Listing Service (MLS) released figures this week revealing a cool breeze blowing over the Greater L.A. real estate market. The MLS compared this year’s 2nd quarter sales volume with that of 2017′s. Most of the neighborhoods tracked by the MLS were off from last year’s numbers. Single family homes in Beverly Hills were down 52% from 2017′s sales volume. West Hollywood–where we just SOLD a fixer this week at 1232 Greenacre for $1,171,000 (pictured for this article)–posted a 17% loss in volume. Los Feliz was down 14%; Santa Monica, off 11%.
 
Most experts relate the city’s lower volume to fewer listings available for buyers to purchase. For example, in 2018′s Q2, the downtown area saw 20 closings, while in 2017 there were 56. Similarly, Silver Lake had 82 closings in Q2 of 2018, down from 120 in 2017.
 
Despite the chill, some neighborhoods caught fire (and across SoCal, the median price just set another record at $536,250). Topanga led the MLS’s survey with a 52% increase in sales volume over last year’s numbers. The always-hot Culver City area was up 26%. The Hollywood Hills (east of the 101 freeway) sizzled at a 21% increase over 2017. Hancock Park (known for its stable micro-market) posted an 8% gain year-over-year.
 

Are foreclosures on the rise again?

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Almost a decade after home foreclosures skyrocketed during the financial crisis, they are starting to rise again in some of the country’s hottest real estate markets. And loosening lending standards may be among the reasons, according to experts. 22 states posted increases in new foreclosure filings in the first 6 months of 2018, compared to the same period in 2017, according to a report out this week.
 
In Los Angeles, foreclosure filings increased 9% on a year-over-year basis — from January to June — and 39% on a quarterly basis — from April to June.
 
Nationwide, however, the total number of homes with existing foreclosure filings in the first 6 months of the year, 362,275, was down about 15% from the same period last year. At its peak, there were 1,600,000 foreclosure filings in the U.S. in the first 6 months 2010.
 

The oceans; they are a-risin’.

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Oceanfront real estate is some of the most beautiful and valuable in Southern California, but a rise in the sea’s level in the coming decades has the potential to flood much of that prime land. A U.S. Geological Survey projected last month that the cliffs in areas from San Diego through Los Angeles to Point Conception could recede by as much as 135 feet by 2100. That’s 82 years from now.
 
Consequently, real estate in tony areas like Palos Verdes and Malibu could feel the impact of rising waters. Those spots could also be made unsafe by landslides or erosion, according to the report.
 
As oceans rise, so do beachfront prices. Besides routine 8-figure deals going down along SoCal’s cliffs and beaches, there are record 9-figure closings in areas like Malibu. A billionaire couple made the biggest buy in L.A. County history in April when they paid $110,000,000 for Hard Rock Café founder Peter Morton’s home on Carbon Beach. NBC executive Ron Meyer is currently hocking his Paradise Cove home for $125,000,000. Do billionaires know something America’s top geologists don’t?
 

Some L.A. homes have increased almost 40% in less than a decade.

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With houses in the Los Angeles area fetching record prices, sellers pocketed some of the largest profits in the nation in 2017, according to a new report from Zillow. Across L.A. and Orange counties, homeowners last year sold homes for around $137,000 more than the price they paid for the residence, amounting to a 33.1% gain in value.

In the city of L.A., jumps in value were even more dramatic. Prices in 2017 were nearly 40% higher than what the seller paid, with a median dollar increase of $175,000. Greater L.A. was one of just 5 of the nation’s 35 largest housing markets where homeowners saw the price of their home increase by 6 figures between buying and selling.

According to the report, the median length of time L.A. sellers owned their homes before selling was just over 9 years in 2017. That means that many of those who listed houses for sale last year bought during the Great Recession, when prices dropped off from levels that today’s home prices have only recently surpassed.

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