Home is where the heart is.

As home prices continue a herky-jerky march upward in Greater Los Angeles, and as rents skyrocket and short-term rentals like Airbnb displace longtime tenants from their rent-stabilized units, more and more people are facing a homeless crisis not of their own making. Earlier this week, L.A. County released results of its latest homeless head count. The Westside of L.A., particularly, experienced a huge leap: 19% more people are homeless there than in 2018.
Many lawmaker and social workers say that common causes of homelessness—mental illness, substance abuse, and gender identity discrimination—are joined by a new cause: Lack of affordability. And although U.S. home prices overall rose at their slowest pace in more than 6 years in March (a sign weaker sales are keeping a lid on price increases), L.A.’s home prices inched-up 1.3% (essentially staying “the same as” last year’s prices).
Those and other statistics were found in an S&P CoreLogic Case-Shiller 20-city home price index study, released this week. The report cited that prices nationwide in March climbed 2.7% over March of 2018, barely down from February 2019’s gain of 3% over February 2018.
Even with March’s barely-smaller increase, home prices continued to rise more quickly than inflation (which increased 2% in March from a year ago). This condition is a contributing factor to an “affordability gap,” that could lead to someone not being able to find housing that fits into their budget. And that could be the first step to no housing at all.
During June’s gay pride season, consider a donation to the Los Angeles LGBT Center, which provides social services and affordable housing to at-risk youth and seniors—and everyone in between.
Have a great Pride weekend.

Is “rich” a state of mind?

We know that the older you are, the higher you set the bar for what it takes to be considered wealthy. But an even bigger influence on that number can be where you live. Being wealthy in Denver doesn’t mean nearly the same thing as being wealthy in Los Angeles, San Francisco, or New York City.
People living in the San Francisco Bay Area—or trying to, anyway—have the loftiest definition of what net worth you need to be rich in their city; an average of $4 million, according to a report published by Charles Schwab. And if you narrow that down just to the baby boomers surveyed (ages 55 to 73), the average jumps to $5.1 million. The percentage of homes worth at least $1 million in S.F. is a shockingly-high 81%.
The Schwab survey is a national sample of 1,000 respondents between the ages of 21 and 75; for city results, Schwab surveyed between about 500 and 700 people in each location.
East Coast boomers in New York and Washington D.C., meanwhile, said it would take $3.6 million to be thought of as wealthy in their cities. The percentage of homes worth $1 million or more in N.Y and D.C. was 10.3% and 4.9%, respectively.
Away from the coasts, Denver had the lowest average dollar figure ($2 million) for what it would take to be thought of as wealthy. It scored high on another measure—the percentage of people who said that feeling personally wealthy is more about how they live their lives than about a dollar amount. More than 75% of people surveyed in Denver agreed with that, compared with 66% for L.A., which had the lowest percentage of contentedness among the cities surveyed.
And when asked what they would do with a $1-million windfall, the cities with the highest percentages of people saying they’d plow it into real estate were Houston (40%), Boston (36%) and L.A. (35.2%).

Up the Down Staircase

2019’s 1st quarter single-family home sales numbers in Greater Los Angeles were verified by the Multiple Listing Service this week: In a comparison of this year’s 1st quarter sales volume over that of the previous year (2018), several of L.A.’s micro-markets were hot, others cool—and some downright chilly. Major increases in sales between Jan. 1st – Mar. 31st took place in neighborhoods like Glassell Park (+268% over 2018—yes, that’s two HUNDRED sixty-eight percent), Inglewood (+143%), Beverlywood (+15%), and West L.A. (+10%).
Sales volume stability was made evident during the beginning of 2019 in markets such as Hollywood (+8% growth over 2018’s 1st quarter), Atwater Village (+5%), Hollywood Hills (+2%), and Cypress Park (0%). Single-digit shifts below 2018’s sales volume took place in areas like Santa Monica (-9%), Eagle Rock (-8%), Westchester (-5%), and Hancock Park (-4%).
Double digit declines in 2019’s 1st quarter sales volume when compared with 2018’s statistics rocked neighborhoods like Malibu (-53%), Beverly Hills (-28%), Silver Lake (-26%), and Marina Del Rey (-18% below 2018).
Have a great, long weekend!

Mortgage Rates Drop as Stocks Take a Dive

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Earlier this week, mortgage rates moved to their lowest point this month. The drop happened as trade tensions remained in focus on the international stage. In general, the worse the US/China trade relationship is at any given moment, the better it has been for the bond market (and the worse it’s been for stocks). This is typical behavior for markets because stocks tend to benefit from growth and certainty while bonds tend to benefit when investors are uncertain, downbeat, or looking for safe havens to ride out volatility. As bonds “benefit” from that demand, prices rise and interest rates fall.
Monday’s precipitous stock market slide set a record for the biggest 1-day drop this year. The stock market’s continued excitability (and reactivity to Twitter) makes real estate a sound investment for stuffing retirement coffers. Los Angeles’ median price for a single-family home rose 2.1% in April to $597,500 (while year-over-year sales volume was off 15.5% due to lack of inventory). Also, rents are at an all-time high in L.A., making rental income property purchases more appealing as passive income generators.
Mortgage rates this week averaged 4.25% on a 30-year fixed Jumbo (up to $3,000,000) and 3.625% on a 7-year adjustable (up to $4,000,000).
In other news: L.A.’s high-end sales (over $15 million) continued to creep along with 5 single-family homes closing in April: 9362 Nightingale Drive ($15,720,000), 1707 Westridge Road ($19,500,000), 21 Oakmont Drive ($33,500,000), and 916 Oxford Way ($34,650,000). The highest condo sale of the month was 101 Ocean Avenue #B400 for $5,500,000.

Have you lost your waze?

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With Angelenos from Encino to Echo Park complaining of a rise in disruptive cut-through traffic on residential streets, Los Angeles officials are trying to secure new data-sharing agreements with companies like Waze and Google Maps. Earlier this week, the L.A. City Council directed the city’s transportation department to attempt to persuade digital mapping companies to participate in a pilot program that would limit the streets that drivers are instructed to use in a given area.
Under the terms of a pilot program, transportation planners could work with app developers to ensure drivers aren’t instructed to take streets designated as local thoroughfares, access roads, and small hillside arterials. Transportation staffers say it’s particularly important that drivers avoid these roads during special events, natural disasters, and school pickup hours.
At transportation committee meeting last month, Gallagher explained that, during peak hours when major corridors are clogged, mapping applications often divert drivers onto streets poorly equipped to handle high traffic volumes. On particularly narrow roads, this can create “standoff situations” or delay emergency vehicles.


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