Market News
"Being an excellent Realtor is more than making transactions happen. It starts with preparing clients for future successes. One part of my job that I love is utilizing my expertise and sharing market observations with clients and friends. The following article is handpicked for you. Enjoy!"
National Association of Realtors® Applauds Long-Awaited FHA Condo Rule
Media Contact, Wesley Shaw | August 14, 2019
The National Association of Realtors® today commended the Department of Housing and Urban Development for finalizing new Federal Housing Administration condominium loan policies. The changes, many of which NAR has championed for over a decade, should yield thousands of new homeownership opportunities and help alleviate affordability restraints impacting markets across the country.
https://www.nar.realtor/newsroom/national-association-of-realtors-applauds-long-awaited-fha-condo-rule
LA’s new Airbnb rules are now in effect—here’s what you need to know
Hosts must register with the city and pay an $89 fee
By Alissa Walker | Jul 1, 2019
New home-sharing regulations are in place for the city of Los Angeles, changing the way hosts from Airbnb and other rental platforms can book vacation stays and short-term rentals.
Starting July 1, 2019, hosts must register and pay an $89 fee to the city. Hosts can only register one property with the city at a time and the property must be their primary residence (where they live at least six months out of the year). Rentals are limited to a 120-day annual cap, and rent-stabilized units are no longer allowed to be used for home-sharing—even if the host owns the unit.
https://la.curbed.com/2019/7/1/20677554/los-angeles-new-airbnb-rules-2019
Supreme Court Ruling Stands to Strengthen Private Property Rights
By National Association of Realtors | July 5, 2019
On Friday, the Supreme Court issued its ruling in the case of Knick v. Township of Scott, a decision which NAR believes will lead state and local governments to be more thoughtful and deliberate when developing laws or regulations that could infringe on Americans’ private property rights.
Specifically, Knick v. Township of Scott declared that plaintiffs who have accused local governments of violating the Takings Clause of the U.S. Constitution may proceed directly in federal court rather than first litigating in local circuits, overturning a 34-year old precedent set by a 1985 Supreme Court ruling.
US existing home sales bounce back in May as spring buying season heats up: report
More than 5.3M homes traded hands last month, a 2.5% spike over April, according to the National Association of Realtors
By Alex Nitkin | June 21, 2019
Sales of existing homes bounced back last month, as a rocky winter gave way to a robust spring buying season in all parts of the county.
Economists credited plummeting mortgage rates for a 2.5 percent national uptick in sales of previously-owned homes between April and May, according to a National Association of Realtors report cited in Bloomberg. About 5.34 million contracts closed last month, beating the association’s predictions.
Red Alert Update! We have a deal on AB 1481 and AB 1482
By DeAnn Kerr | May 30,2019
As you know, earlier this week C.A.R. issued a large-scale Red Alert, asking those of you represented by Democrats in the Assembly to call your legislator to express your concerns about two bills, AB 1481 and AB 1482, that together imposed unacceptable regulations on rental property owners. AB 1482 would have imposed a very restrictive rent cap and AB 1481 would have created an expansive “just cause” eviction right.
Last night, due in large part to your calls to legislators, C.A.R. was able to successfully negotiate a deal with the bills’ authors on amendments that allow C.A.R. to remove its opposition.
4 Ways To Practice Good Cyber Hygiene
You play a critical role in your business' fraud prevention efforts. Use the tips below to lead by example in protecting yourself and your company from the ever-evolving threat of cybercrime.
By Al Brooks and Mike Kelly | May 15, 2019
One of your company's biggest vulnerabilities to cyberattacks is also one of its most ubiquitous factors: personnel. When our modern dependence on technology to perform commercial real estate (CRE) activities-like collecting rent, paying vendors and managing portfolios-mixes with human error, cybercriminals have an opening to engineer attacks that can lead to millions of dollars in losses. Therefore, it's important for businesses to practice good cyber hygiene from the top-down. Here are a few key tips you can follow to help strengthen your business' cyber readiness:
Real Estate News
By Steven Fisher | February 19, 2019
Fannie Mae expects home sales to stabilize in 2019 after falling in 2018, according to the Fannie Mae Economic and Strategic Research Group’s 2019 Economic and Housing Outlook. Rates are expected to change little in 2019 from their level late last year of around 4.5 percent, allowing potential homebuyers time to adjust to the rate environment after the volatility experienced in 2018. The Fed’s continued efforts to unwind expansionary monetary policies implemented during the recession have the potential to add to the headwinds facing the economy,” said Fannie Mae Chief Economist Doug Duncan.
Chinese exiting US real estate as Beijing directs money back to shore up economy
By Esther Fung | January 29, 2019
Chinese net purchases of U.S. commercial real estate last year dwindled to their lowest level since 2012, as Beijing kept up the pressure on Chinese investors to bring cash home during a period of worsening economic growth.
Insurers, conglomerates and other investors from mainland China were net sellers of $854 million of U.S. commercial property in the fourth quarter, according to Real Capital Analytics. That marked the third-straight quarter Chinese investors sold more U.S. property than they bought, the first time ever these investors have been sellers for that long a stretch.
Tax Win: IRS Provides Clear Test on How 20% Deduction Applies to Rental Income, Exchanges
By National Association of Realtors | January 27, 2019
The Internal Revenue Service has issued final rules on the 20 percent business income deduction (Sec. 199A of the Tax Code) that was enacted in late 2017 as part of the Tax Cuts and Jobs Act.
Among other things, the rules confirm that the deduction applies to your business income, as a real estate agent or broker, if you operate as a sole proprietor or owner of a partnership, S corporation, or limited liability company. It applies even if your income exceeds a threshold set in the law of $157,500 for single filers and $315,000 for joint filers.
In addition, the rules provide guidance that NAR has been seeking on two other provisions of importance to you: 1) whether any real estate rental income you have is eligible for the deduction, and 2) how the deduction applies to properties you've exchanged under Sec. 1031 of the tax code.
US home sales plummet, adding to fears of 2019 slowdown
The 10% drop in December ended a year that was weakest for existing home sales since 2015
By John O’Brien | January 22, 2019
The number of homes sold dropped sharply in December, raising fears that 2019 will be marked by a continued slowdown in the U.S. housing market.
Sales of existing homes dropped 10.3 percent last month compared to the same time in 2017, and 6.4 percent from November, according to a report from the National Association of Realtors, cited in the Wall Street Journal.
https://therealdeal.com/chicago/2019/01/22/us-home-sales-plummet-adding-to-fears-of-2019-slowdown/
“Canary in the coal mine”: Home flipping falls nationwide to 3-year low, report finds
Investors flipped nearly 46K houses and condos in Q3, signaling a possible slowdown
By Keith Larsen | December 06, 2018
Home flipping in the U.S. is down to its lowest levels in more than three years, the latest sign that the housing market is experiencing a slowdown.
Investors flipped 45,901 single-family homes and condos in the third quarter, down 12 percent from a year ago, according to a report published Thursday by Attom Data Solutions. It was the lowest number since the first quarter of 2015.
FHFA Announces Maximum Conforming Loan Limits for 2019
Fannie Mae and Freddie Mac Baseline Limit Will Increase to $484,350
News Release from the Federal Housing Finance Agency | November 27, 2018
Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced the maximum conforming loan limits for mortgages to be acquired by Fannie Mae and Freddie Mac in 2019. In most of the U.S., the 2019 maximum conforming loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018.
Baseline limit
The Housing and Economic Recovery Act (HERA) requires that the baseline conforming loan limit be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price. Earlier today, FHFA published its third quarter 2018 House Price Index (HPI) report, which includes estimates for the increase in the average U.S. home value over the last four quarters. According to FHFA's seasonally adjusted, expanded-data HPI, house prices increased 6.9 percent, on average, between the third quarters of 2017 and 2018. Therefore, the baseline maximum conforming loan limit in 2019 will increase by the same percentage.
Landlords are threatening rent hikes if Proposition 10 passes, activists say
The ballot measure would roll back state regulations on rent control
By Elijah Chiland | Oct 8, 2018
In August, North Hollywood resident Jacob Swanson, 36, heard from his building’s property manager that rent for his apartment would increase from $1,850 to $2,000 per month, higher than the typical yearly increase he was used to.
Eager to know the reason for the higher rent hike, he emailed the property manager to ask if repairs or upgrades were planned for the building. The reply he received didn’t mention any repairs; instead, the building’s manager blamed the increase on “the upcoming election.”
https://la.curbed.com/2018/10/5/17937754/prop-10-los-angeles-rent-control-increase
LA home prices drop for the first time since January
Have housing costs reached their limit?
By Elijah Chiland | Aug 30, 2018
For the first time since January, home prices in Los Angeles County fell month-to-month in July, according to a new report from CoreLogic.
The median sale price for the month was $607,500, down 1.2 percent since June, when home prices soared to a record-high $615,000.
LA’s all-time price record had been shattered in each month leading up to July.
https://la.curbed.com/2018/8/30/17800646/los-angeles-home-prices-down-record
LAX Board Approves $4.9B People Mover Contract
By Howard Fine | April 5, 2018
The Los Angeles World Airports Board of Commissioners on April 5 voted to award a $4.9 billion, 30-year contract to a contractor consortium to design, construct and operate the planned people mover at Los Angeles International Airport.
The board awarded the contract to a consortium of seven contractors known as LAX Integrated Express Solutions, or LINXS. The vote came six weeks after an initial decision to begin negotiations with the contractor consortium. The price of the contract increased $400 million to allow for flexibility in interest rates for financing over its 30-year duration, LAWA spokesman Mark Waier said.
http://labusinessjournal.com/news/2018/apr/05/lax-board-approves-49b-people-mover-contract/
Western cities are struggling to stem the flow of Chinese buyers
Governments have tried taxing foreign buyers
By Meenal Vamburkar | June 7, 2018
As Chinese buyers flood the real estate market in Western cities, officials are seeking to curtail the trend — to no avail.
Chinese investors drove an estimated $100 billion in property purchases outside China in 2016, the Wall Street Journal reported. Though the foreign capital was welcome after the financial crisis, officials in Canada and Australia are now concerned price bubbles threaten their regional economies, the report said.
Will the housing bubble cause another financial crisis?
Before the crash we had housing oversupply, but today we have a housing shortage
By Jeff Andrews | May 2, 2018, 2:43pm EDT
At a recent doctor’s appointment I told my physician about a story I’m working on that involves the securitization of loans in which the underlying collateral is housing, evoking the dreaded term “mortgage-backed securities.”
My doctor’s reaction was something I’ve heard several times from friends and family lately: “They’re doing the same things that caused the financial crisis!”
In a lot ways that is true; much of the financial machinery that produced mortgage-backed securities and their derivatives are still in place, churning out the same products that wreaked havoc on the global economy.
https://www.curbed.com/2018/5/2/17306936/housing-bubble-financial-crisis-again-us
Miranda's Notes:
This conversation has become more frequent in the past year or so. In China, I was brought up with an ancient wisdom that resonates with almost all Chinese people: "Be vigilant in peace times. 居安思危." Applying it here, I say "be vigilant in PEAK time!"
The title of the article says it all. (This is probably why you clicked on it!) The author has precisely captured the differences between the previous and current market environments, and has given a fair and balanced analysis. However, what I found most interesting and revealing lies in the very last sentence of the article - the author sees the current market as a "bubble" instead of a normal pace of appreciation.
Patrick Soon-Shiong — immigrant, doctor, billionaire, and soon, newspaper owner — starts a new era at the L.A. Times
By Meg James and Andrea Chang | Apr 14, 2018, 4:15 PM
A 43-year-old woman lay dying on the floor of the emergency room lobby at Martin Luther King Jr.-Harbor Hospital as her boyfriend frantically called 911 for help from a pay phone outside.
Dr. Patrick Soon-Shiong read about it in the Los Angeles Times.
“That story,” he recalled recently, “it haunted me.”
Soon after the 2007 article was published, the billionaire physician drove across town to visit the troubled hospital south of Watts. He tracked down the doctor who was in charge that night and told him, “This is completely unacceptable.”
http://www.latimes.com/business/la-fi-patrick-soon-shiong-profile-la-times-20180413-htmlstory.html
New state map tells you if you live in an earthquake fault zone
It's better to know now, before the shaking starts
By Bianca Barragan | Mar 28, 2018, 3:12pm PDT
Living in fear that your home is on a fault line? Validate or negate your fears with a new map from the California Geological Survey.
The Los Angeles Times says the map allows users to input their address or share their location to see whether they’re living in a fault zone, in an area at risk of liquefaction zone (when shaking causes the ground to move like a liquid, meaning anything on top of it could slide), or in danger of a post-earthquake landslide.
https://la.curbed.com/2018/3/28/17174106/los-angeles-earthquake-fault-liquefaction-hazard-zone
LAX moves to redevelop huge swath of airport-adjacent land
Offices and recreation space coming to 93 acres north of LAX
By Bianca Barragan | Mar 26, 2018, 5:22pm PDT
Los Angeles World Airports, which owns and operates Los Angeles International Airport, is working to gradually develop a huge swath of its vacant land in Westchester. Today, it announced a step forward: It’s looking for proposals to redevelop 93 acres just north of LAX and Westchester Parkway.
https://la.curbed.com/2018/3/26/17166044/lax-redevelopment-proposals-westchester
The CLO, a financial crisis bogeyman, is making a comeback
Issuance more than doubled in 2017, and is expected to grow this year
By Konrad Putzier | March 02, 2018, 8:30AM
Mention the term “collateralized debt obligation” and financial watchdogs immediately seize up. Real estate CDOs, or mortgages repackaged into bonds, were a big reason for the U.S. financial market’s meltdown in 2008. Following the Great Recession, they more or less disappeared from the scene. But they are now staging a comeback under a new name: collateralized loan obligation, or CLO.
https://therealdeal.com/2018/03/02/the-clo-a-financial-crisis-bogeyman-is-back/
The Tax Cuts and Jobs Act - What it Means for Homeowners and Real Estate Professionals
By National Association of Realtors
The National Association of REALTORS® (NAR) worked throughout the tax reform process to preserve the existing tax benefits of homeownership and real estate investment, as well to ensure as many real estate professionals as possible would benefit from proposed tax cuts. Many of the changes reflected in the final bill were the result of the engagement of NAR and its members, not only in the last three months, but over several years.
Here’s how to help people affected by fires in Southern California
A small contribution can go a long way
By Elijah Chiland | Updated Dec 8, 2017, 9:41am PST
The Creek, Rye, and Skirball fires have damaged or destroyed dozens of structures and spurred hundreds of thousands evacuations across Los Angeles County. In Ventura County, the Thomas Fire has been even more devastating, claiming at least 400 structures and forcing nearly 100,000 people to evacuate.
Wondering how you can help those affected by the fires? Here are a few good ways.
https://la.curbed.com/2017/12/7/16746514/creek-la-fire-how-to-help
Self-storage industry could face head-on impact of driverless cars
E-commerce, office and retail could benefit
By WSJ– Katherine Kallergis | October 25, 2017, 12:30PM
Driverless cars and the increasing use of ride-sharing services like Uber and Lyft could hit the self-storage industry the hardest, according to a new report.
Researchers are predicting that because people will own fewer cars, they’ll use their garages for storage space instead of self-storage facilities. The report warns investors to consider the impact of changing trends in transportation and how they will affect property values in the long term.
https://therealdeal.com/miami/2017/10/25/self-storage-industry-could-face-head-on-impact-of-driverless-cars/