Up the Down Staircase

2018’s 4th quarter single-family home sales numbers in Greater Los Angeles were verified by the Multiple Listing Service this week: In a comparison of last year’s final quarter median price over that of the previous year (2017), several of L.A.’s micro-markets were hot, others cool—and some downright chilly. Major price appreciation in 2018 took place in neighborhoods like Cheviot Hills – Rancho Park (+50% over 2017), Malibu (+42%), Atwater Village (+30%), and Bel Air (+11%).
Price stability was made evident during the end of 2018 in markets such as Hancock Park (+4% growth over 2017’s 4th quarter), Silver Lake – Echo Park (+2%), Westchester (+1%), and Playa Vista (0%). Single-digit shifts below 2017’s median prices took place in areas like Mount Washington (-1%), Culver City (-2%), Los Feliz (-5%), and Palms – Mar Vista (-7%).
Double digit declines in 2018’s 4th quarter median prices when compared with 2017’s statistics rocked neighborhoods like Hollywood (-13%), Beverly Hills (-18%), Santa Monica (-19%), and Marina Del Rey (-32% below 2017).

It pours, man, it pours.

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Weeks of on-and-off rain—and snow at higher elevations—have nearly washed away drought conditions across CA, according to report released this week by U.S. Drought Monitor. Just a week ago, nearly one quarter of the state, including all of Los Angeles County, was experiencing “moderate drought” conditions. As of Tuesday this week, that share had fallen to just 10.6%, and L.A.’s drought level was downgraded to “abnormally dry.”
Precipitation in the last 30 days has replenished CA’s largest reservoirs, too. 6 of the 12 tracked by the Department of Water Resources were filled to above average levels Wednesday, and both Lake Perris (in Riverside County) and the San Luis Reservoir (southeast of San Jose) are nearly 90% full. The snowpack is now above the historical median at nearly all of the state’s major mountain peaks, and will eventually produce even more much-needed water.
SoCal gets wet again this weekend, according to the National Weather Service: A pair of small storms are expected to bring light rain to our neighborhoods Friday night and Sunday morning. So get out those umbrellas and visit our open houses. It’s a great time to beat fair-weather competitors.

Will the Superbowl Raise Housing Prices?

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“Inglewood: Future home of the Rams and Chargers,” proclaims a current MLS listing for a 3BR/2BA 1,326 sq.ft. home at the northern edge of the city, just a few miles from the colossal steel husk that will eventually become the world’s most expensive sports arena. The listing includes only 2 photos: An exterior shot of the fixer, and a flashy nighttime rendering of the future stadium—as if buying a house in Inglewood were equivalent to snagging a seat on the 45-yard line. And while the stadium is causing a real estate bubble in surrounding neighborhoods, could a Rams win this weekend drive interest and prices even higher?
The town’s sellers are hoping to cash-in on proximity to the stadium; much the same way loft sellers in DTLA did when the Staples Center was in its infancy. The real estate website Curbed L.A. recently surveyed more than 80 online listings in Inglewood, where residents are predicting that the arrival of pro teams will electrify their community’s business districts and housing market. More than half of the listings mentioned the stadium or the sprawling complexes of apartments, restaurants, and retail businesses set to surround the complex. 
Current home values in Inglewood are zooming as fast as Todd Gurley. Between January 2016—when the NFL agreed to let the Rams and Chargers relocate to Inglewood—and end of 2018, the median price of homes in the city jumped 37.3% to $542,100, according to Zillow. That’s less than L.A. County’s median of around $600K, but that’s almost double the rate of the county, where prices climbed 18.7% over the same time period. Inglewood home prices also went up in the 2 years leading up to 2016, but at a rate closer to that of the rest of the county: 17%, compared to a little under 15% countywide.

Crazy Rich Buyers and Sellers

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While millions of Los Angeles residents struggle to pay for basic needs like food and housing, a handful of wealthy home buyers are making the urban area one of the world’s most desirable real estate destinations according to a report out this week from Knight Frank.
The data collected shows the L.A. area is one of 17 “ultra-prime” residential markets worldwide, where homes regularly sell for eight-figure amounts. Not all that long ago, a sale that costly could have broken local records, but home sales–even above $25 million–have become routine in recent years. According to the report, 51 L.A. homes have sold for at least that much since 2015, with 18 of those selling in 2017 and 2018.
Where are L.A.’s priciest homes selling? Not surprisingly, the 90210 zip code claimed the highest share of sales analyzed in the report, with 20 qualifying transactions since 2015. Close behind was 90077, which covers Bel Air (18 homes there sold for more than $25 million).
L.A. was one of five American real estate markets included on the list. The others were New York City, Malibu, Palm Beach, and Aspen. Notably absent: San Francisco. The top two international cities were London and Hong Kong.

Rates Plunge as the Shutdown Drags On

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It was a happier new year as mortgage rates plunged earlier this month. The precipitous drop sparked a 23.5% spike in mortgage applications after an unusually weak holiday season. CNBC reported that interest rates spiraled to their lowest levels since April 2018, which resulted in a refinancing boom.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.74%, from 4.84%, with points increasing to 0.47 from 0.42 (including the origination fee) for loans with a 20% down payment. The rate is 22 basis points lower than 1 month ago.
In a separate report out this week, the Nat’l Assoc. of Realtors claimed just over 10% of Realtors surveyed said the shutdown was having an impact on their businesses. Some reported government employees pulling out of purchase offers and others being denied loans due to loss of income.


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