Westchester On The Rise

Silicon Beach is having a very big effect on Real Estate in Southern California

Areas like Santa Monica, Venice, Marina del Rey, and Playa Vista are at the forefront of the “tech movement” and experiencing all the benefits that are associated with the large amounts of highly paid employees flooding the market. However, the often-overlooked neighborhood of Westchester, is having something of a moment and it has the potential to be the next big thing.

Westchester’s 90045 ZIP Code is one of just a handful of places in the region where house prices have returned to pre-crash levels, with the median price for a single-family home hitting $795,000 in the third quarter, according to CoreLogic DataQuick. That’s a 25% increase in the last two years. And it’s all attributed to the recent phenomenon that has brought the tech to Silicon Beach.

Media, entertainment, and tech companies have been picking up office space as fast as possible in Playa Vista. Last month, Google spent $120 million dollars on 12 vacant acres zoned for a massive office complex. That amount of space equates to roughly 6,000 new workers in the area. (Google provides about 200 sq for each employee.)

If you drive through the area you will see a wide array of traditional postwar ranch homes that were built in the ’40s and ’50s for returning GIs and aerospace workers. Another thing you will see is a good amount of space. The lots are bigger and the houses aren’t maxed out like many other areas on the Westside. With that space being a desirable “commodity” in our market we are seeing more and more people becoming interested in this previously unknown neighborhood.

Lately, a wave of rehabs and additions has also driven prices higher. Work trucks are a common sight in Westchester these days with developers and new homeowners updating these old ranches into more modern homes. It’s quite hard to believe but in the last six months three houses have sold for around $2 million and several more are on the market around the $1.5 million mark.

A growing number of the neighborhood’s postwar ranch houses are being torn down and rebuilt, often at twice the size. Some of them look more like houses you’d find closer to the beach and they’re often aimed at buyers who’ve been priced out of those neighborhoods. Many of those buyers are looking for more contemporary and modern homes. Westchester didn’t really have those until now…

According to Cyndi Hench, president of the Neighborhood Council of Westchester/Playa, the neighborhood is definitely evolving. Although it remains home to some of the children of the old Hughes engineers who moved there in the ’50s, it’s drawing more newcomers.

And when some apartment buildings going up on the edges of the neighborhood are done, and when Google opens its Playa Vista development, Hench expects her quiet pocket of town will be right in the middle of the action.

“This is going to be a different place in five years,” she said. “Westchester will definitely be on the map then.”

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Winter Real Estate: A Time For Hibernation or Not?

Everybody knows that winter is a dead time for real estate. Or is It?

At least that’s the widely held belief. But national statistical studies suggest it’s not necessarily the case. Winter can be a surprisingly advantageous time to list, shop, negotiate and/or buy.

According to real estate website Redfin and their two year study if you want to sell for more than your asking price, listing in December, January, February and March gives you a better chance on average than if you list any time from June through November. In 2012, December listings produced the highest percentage of above-asking sales for the entire year — 17%.

If your goal is to sell relatively quickly, February “is historically the best month to list, with an average of 66% of homes listed then selling within 90 days,” according to Redfin. In the two-year study completed last December, researchers found that in each of 19 major markets, including cold-weather cities such as Boston and Chicago, “home sellers were better off listing their homes in the winter than during any other season.”

Researchers are quick to note that the advantages of listing in winter compared with other seasons are not huge. But the fact that winter produces at least competitive or better results by some measures should encourage some potential sellers to get into the game sooner rather than later.

Nela Richardson, chief economist for Redfin, said “that shoppers who are active during the winter months are serious buyers. Most people are not window-shopping in December and January, as many do in the spring months.”

Quick Tip: Some sellers pull their unsold houses off the market during the winter, hoping for better results in the spring. By doing so, they leave a smaller inventory of active listings therefore lessening the competition among sellers who list in January and February.

Winter-season buyers may find some sellers more flexible about negotiations over prices and terms than they would be during the middle of the spring. Mary Bayat, a broker active in the Washington, D.C., market and chairwoman-elect of the Northern Virginia Assn. of Realtors, said that in the last few weeks she has participated in three deals involving sellers who were far more open to negotiations than they had been months ago.

Quick Tip #2: Real estate does not hibernate from December through March. More than 5 million homes are resold annually in the U.S., and many of them are listed and sold during the winter months.

In strong local housing markets such as Los Angeles, San Diego, Phoenix, Seattle, Austin, Boston and Washington, D.C., the likelihood of selling your home within 180 days is highest when you list during the winter months compared with any other season, according to Redfin’s 2013 study.

Winter is warmer for real estate than you might think.

U.S. Home Sellers Return for Spring 2014

Last year we experienced an extremely low inventory for listings in our area. However, the properties that were up for sale had such high demand that the values of these few listings skyrocketed. Now, as the market’s busiest season approaches, those increasing values are spurring more listings as homeowners regain equity lost in the crash. The supply increase is poised to damp price gains while high mortgage rates cut into demand.

According to Jed Kolko of SF-Based Trulia, “prices won’t be rising as much as they were rising last spring. It will be a less frantic market with more inventory and fewer investors.”

Inventory rose most in some of the tightest areas, from Arizona and California and Georgia to Florida, where leaps in prices erased negative equity and encourage homeowners to lock in profits. (Realtor.com)

Paul Diggle of Capital Economics Ltd. has stated that prices nationwide will climb 4 percent this year compared to 2013’s expected 11 percent gain. Increasing mortgage rates also will weigh on prices because the higher costs will push some buyers out of the market, while forcing others to look for cheaper deals.

Capital Economics Ltd. projects 30-year fixed mortgage rates of 5 percent by the end of the year. (Compare that to 4.31%, which is this week’s national average.) Rates will climb as the Federal Reserve scales back bond purchases that have bolstered the housing recovering by holding borrowing costs down.

We saw an uncharacteristic increase in listings at the beginning of the year, due to the fact that homeowners are getting a jump on the spring selling season and listing their properties earlier than usual. According to an agent from Redfin, Paul Reid, sellers are “nervous about what the spring is going to bring. They don’t know if everybody will list this spring then you’ll have a big counterbalance toward too much inventory, or if there’ll be a crunch again.

First time buyers accounted for 27 percent of completed home purchases in December, down from 30 percent a year earlier. This may be due to the fact that adjustable-rate mortgages may not be an option because of stricter lending standards adopted after the housing crash.

 An increase in supply would indicate the housing market is moving toward more normal conditions as it rebounds from the five-year slump that started to turn around in 2012.

Mark Zandi, chief economist for Moody’s Analytics Inc., states “inventories had been very, very low and still are despite this turnaround. It’s part of the process toward normalization, although the weakening in demand needs to be watched very carefully if demand does not pick up in the spring, that’s going to call into question the strength of any recovery.”

Buyers of existing homes will face less competition from investors, who have caused shortages in many areas. Bulk purchases will start to slow as the foreclosure crisis fades and bargains disappear.

 

The End of Suburbia As We Know It

Young people shunning the suburbs in favor of the hustle and bustle of city life are leading the charge in the “reurbanization of America,” real estate mogul Sam Zell told CNBC on Tuesday.

“You’re drawing all the young people in America to these 24/7 cities. The last thing they want to do is live in the suburbs,” Zell said in a “Squawk Box” interview. “In that respect, you’re increasing demand for housing in the urban markets.”

The demand for the suburban lifestyle had been driven mainly by safety and schools, he said. “If you wanted to see the end of suburbia, all you’d need to do is make the school systems in the cities triple-A and why would anybody live in the suburbs,” Zell said.

One of the byproducts of people moving to cities is soaring demand for apartments. “We are seeing 96 percent occupancy,” said Zell—who’s chairman of the real estate investment trust Equity Residential, one of the largest apartment groups in the country. Of the 18,000 units the REIT manages in New York City, Zell estimated 45 percent are occupied by just one person.

“It’s probably going to happen here in New York first,” he said. “You’re going to see 300-square-foot apartments, directly related to that one person wanting to live alone—and saying, ‘I’ll give up space for privacy.'”

– CNBC

Seven Most Popular Styles of Homes

While countless people know that a single family home with a yard will cost more than a studio apartment, many of those people don’t know that the style of the house also has a large affect on the price. 24/7 Wall Street received data from the real estate site Trulia.com that gave insight to the popularity of different home styles around the country. The following is a breakdown of the most popular home styles across the country and respective prices.

Due to the free market nature of our country, countless styles of houses have been created throughout history. The style of house also depends largely on what area of the country you live. Colonial and Federal Revival styles homes are found more in the Northeast, Victorian homes are popular on the West Coast, and Ranch-style homes are found throughout the U.S..

Most Popular Home Style Categorized By Average Price:

  1. Mediterranean | $1,315,177 | Most Popular Between 1920 and 1930
  2. Tudor | $588,327 | Most Popular in the 1930s
  3. Colonial | $457,026 | Most Popular in the Late 1800s
  4. Victorian | $431,009 | Most Popular Between 1860 and 1900
  5. Split Level | $295,529 | Most Popular in the 1950s
  6. Ranch | $228,140 | Most Popular Between 1945 and 1970
  7. Bungalow | $163,578 | Most Popular Between 1880 and 1930

Each home style has their own unique characteristics and features that led to them being popular in a certain eras.

It’s Becoming A Seller’s Market

According to The National Association of Realtors it’s becoming a seller’s market, something that buyers in many parts of the United States have know for a while now.

According to several statistics the number of homes listed for sale in January fell by 4.9%, leaving around 1.74 million properties on the market. That’s the lowest since December of 1999, when there were 1.71 million homes on the market.

This is good news for sellers because that means home prices are also on the rise. In fact, home sales rose by 0.4% in January, to an annual rate of 4.92 million units. While that might not seem like a large increase, it is still up 9.1% from one year ago.

The reason for this price increase is that there is an increasing amount of buyers all pursuing the same supply of homes. If the trend holds, prices will keep going up.

While inventories typically increase in the spring, the Realtors’ group has expressed growing concerns that sales volumes are being held back by the lack of choice. This is good news for homeowners who have watched home prices drop over the last six years, but it’s bad news for buyers—and for anyone that makes their living selling real estate.

California, Arizona, and other markets have experienece the most dramatic inventory declines. These cities have large numbers of underwater borrowers—people who owe more than their homes are worth—while many others may have equity but aren’t willing to sell because prices have fallen so far.

Investors have also been aggressive in buying up properties that are selling for less than their replacement cost.

Home sales could rise to 5.2 million units this year, an increase of nearly 12% from last year, according to economists at Goldman Sachs. They base their forecast on household formation and demographics, which both suggest rising demand for housing in the coming years, and affordability measures such as mortgage rates and home prices.

But the economists note that there’s a considerable amount of uncertainty that could make those targets hard to hit, particularly if there’s nothing for would-be buyers to purchase.

– Wall Street Journal