NEWS

Into the Weeds

2.15.20
As more states relax marijuana laws, these legal changes are affecting the real estate industry on multiple levels, according to a new National Association of Realtors (NAR) survey released on Tuesday. The “2019 Marijuana and Real Estate: A Budding Issue” report says Realtors have noticed the legality of Mary Jane making an impact on real estate markets in various ways. In states where pot is legal in some form, 9 to 23% of Realtors polled said they believe residential inventory is dwindling for a few reasons, including the marijuana industry’s all-cash purchases. 12% noted that they’ve seen an increase in residential property values near dispensaries. 27% reported that they’ve seen a decrease in property value.
 
On the leasing side, about 50% of survey respondents operating in states where medical marijuana is legal reported having no issues leasing a property formerly occupied by a tenant legally growing pot—as long as the property had been modified and “restored.” In locales where both medical and recreational marijuana are legal, 49% of Realtors said they did not have difficulty leasing a former grow property to a new “grow” tenant.
 
NAR’s study also revealed the marijuana industry’s positive impact on commercial property demand, and in some areas, commercial property value (think Desert Hot Springs, CA—known these days as “Desert Pot Springs”). More than 40% of Realtors saw an increase in commercial property values near dispensaries in states where marijuana is legal.

Is Luxury on the Rise?

2.8.20

According to a report out this week, many rich home buyers laid low in 2019, as economic uncertainties turned purchasing in some cities into risky propositions. But don’t be surprised in 2020 to spot the world’s wealthiest people beginning to spend again as home prices in highly-desired areas stabilize—and even start to rise.

The global property consultancy firm, Knight Frank, sees “activity and prices increasing in some prime cities, but by smaller margins than in the past.”

Los Angeles’ sweet spot is in the $2,000,000 to $10,000,000 range, where Knight Frank predicts a 2% rise in sales prices in 2020. Despite some 9-figure sales in 2019, demand was “weak overall” for the highest of high-priced digs, says the report, and does not see that trend changing. The report cited “a more bullish outlook on homes priced below $10M.”

Paris leads the firm’s 2020 forecast for growth, with a 7% increase in luxury sales prices, followed by Miami (on the rebound to a 5% increase over 2019) and Berlin (4%), where luxury homes are in short supply. London’s outlook is almost flat, with a 1% increase expected in 2020, but that’s good news from their 3% drop last year.

The forecast is not glittering for everyone. Vancouver’s high-end sales figures are expected to drop 5% in 2020. New York may drop 3% due to a glut of inventory in the luxury space: To sell all the newly built condos in Manhattan at the current sales pace, it would take nine years. Knight Frank also sees a slight drop in Hong Kong’s market (2%), in part due to political unrest and trade wars.

Years of Pain in L.A.’s Rental Market

11.23.19
If you’re a renter in 2020, you may be paying more per month than you would if you owned your own home or condo. According to a new study from listing service RentCafe, the average rent in Los Angeles has ballooned to $2,527, a whopping 65% increase since 2010. That’s significantly higher than the national average rent increase of 36% over the same period.
 
Over the last 10 years, the number of U.S. renters surpassed 100 million for the first time, growing from 99.4 million in 2010 to 108.5 million in 2018. Renters now make up 34% of the U.S. population, up a full percentage point from a 2010. That number is nearly double in L.A., where renters make up 60% of the population. That ranks our city as the 19th-highest among the country’s 260 largest cities. Glendale has California’s highest concentration of renters at 67%.
 
Although sweeping controls are now in place to cap rent increases at 5%, the already-astronomical monthlies are making landlords richer, and renters less solvent. New Year, new plan: Think about purchasing. There are a lot of options for financing out there (including low down payments and low interest rates) that could put you ahead of a perceived affordability gap.
 

The weather outside ain’t frightful

12.21.19 pic
This has been a year for the record books in real estate (L.A.’s median home price hit an all-time high)–and a record-breaking 12 months of giving at L.A. Luxe Group. Throughout 2019 (and for over a decade), a donation from every sale went to an L.A.-based animal welfare organization.
 
I’ll get back to the upcoming listings, current success stories, and open house alerts next time.
 
Wishing you peace and joy this holiday season, and a prosperous 2020!
 
 

October Surprise

11.23.19
October saw another rise in Los Angeles’ median home value, up from September (which was up from August) to $696,900. L.A.’s home values have gone up 2.3% over the past year, and the somewhat-accurate website Zillow is predicting they will rise 2.5% in 2020. The median list price-per-square-foot in L.A. was $543 in October, which was higher than the SoCal average of $440. The median price of homes listed in L.A. in October was $849,900, while the median price of homes sold last month city-wide was $710,400. L.A.’s median rent in October was a record-breaking median of $3,607, which is higher than the SoCal’s $3,200.
 
Zillow also quantified (from public records) the percent of delinquent mortgages in Los Angeles, which was 0.7% in October, which was lower than the national value of 1.1%. Delinquency is triggered when 3 or more mortgage payments are missed.
 
The percent of L.A. homeowners “underwater” on their homes was 4.3% in October, which is higher than SoCal’s 4.1%. Zillow cited the primary reason was cash-out refinancing, where homeowners wiped-out their home’s equity and pocketed the profits.
 

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