My website: www.sandralew.com

Millennials are those defined to be under 35.  They are outpacing the number of boomers. They are in no rush to buy their own homes and may be saving up by living in their parents homes longer than previous generations. They still desire to buy in the future but have very clear preferences in their desires which will further shape new home trends. They want to be close to everything and have a high quality of life. Urban life suits them and they want convenience like being close to work, a local starbucks, restaurants & bars,  high technology options in the home, open versatile floor plans and they are willing to pay a premium. Many coastal regions of Southern California foot this desire thus demand for these cities like Santa Monica, Venice, Playa Del Rey, Playa Vista and Marina Del Rey will continue as well.

What millennials want in a home

Published: Sept 15, 2014 6:02 a.m. ET

Not ready to buy, but starting to fantasize

Good cellphone coverage? Check. Easy access to bars and Starbucks? Check.

By AmyHoak  -Personal Finance Editor

Millennials aren’t in a rush to buy their own homes. Heck, many of them aren’t in a rush to move out of their parents’ houses.

That doesn’t mean, however, that they’ll remain renters—or freeloaders in mom and dad’s basement—forever. And the housing and mortgage industries can’t wait.

“The story line has been that millennials are not forming households, they’re living with mom and dad,” said Jonathan Smoke, chief economist for Realtor.com. But this group’s usage of mobile real estate applications and websites is on the rise, Smoke says, up 61% year-over-year as of July based on his analysis of comScore data of people between the ages of 25 and 34. More than one-third of millennials used a mobile device in July to look at real estate data, he said.

That says to Smoke that millennials are at least thinking about buying or renting a home, and researching the market to learn their options.

What’s more, a recent Redfin survey found that 92% of people in this age group who don’t have a home want to buy one in the future, said Nela Richardson, the real-estate company’s chief economist. And there are some clear preferences in what they want in a home.

As millennials reach peak home-buying age, their needs and wants will shape the future of the housing and mortgage industries—much as the boomers did before them—based on the sheer number of millennials out there, Richardson said. Smoke estimates there are 87 million millennials in the U.S., compared with 75 million boomers.

The Redfin analysis delves into census data to determine where most millennials are living today, and there’s a dominant theme: Millennial renters like to be close to everything they need, including transportation, work, coffee shops and bars, Richardson said.

That means millennials are concentrated in neighborhoods such as Dupont Circle and Georgetown in Washington, D.C.; north of the Loop on Lake Michigan in Chicago; and in Capitol Hill, Queen Anne, Magnolia and Ballard in Seattle. Rentals can be pricey in these areas.

Lots of amenities

And this amenity-rich living is likely something they’re going to want when they buy a home, Richardson said. Of course, neighborhood affordability also is a huge factor when it comes to buying a first home, she added. After all, when you’ve been paying high rents for years in trendy neighborhoods, it makes it that much harder to save up for a down payment.

But the places where millennials settle may adapt to become more like the urban areas where they once rented—places where there’s always a coffee shop nearby, Richardson said.

Good schools

For those with kids or planning to start a family, of course, schools are also important. When house hunting, those born after 1980 are less likely than other generations to compromise on school districts, according to a Realtor.com survey. Fifty-two percent of millennials said the quality of a school district could be a deal breaker in their search for the perfect home, compared with 31% of all buyers.

Home technology

Millennials will forgo other home comforts in return for more technology capabilities in a home, said Sherry Chris, chief executive of Better Homes and Gardens Real Estate. They want a home that is connected, one where they can use their iPad to turn the heat up and down, she said.
And in a recent Century 21 survey of single homeowners, 28% of those between the ages of 25 and 35 said good cellphone coverage is a deciding factor in whether they would buy a particular home, said Rick Davidson, chief executive of Century 21 Real Estate.

Smaller, flexible spaces

Both boomers and millennials want smaller spaces these days, said James Roche, chief executive of Houseplans.com, a provider of online home-design and remodeling plans. But millennials aren’t attracted to traditional styles; instead, they’re looking for modern homes that are cost- and energy-efficient, and designs that better reflect how people live comfortably today.

Indeed, part of the reason they’re thinking small: They don’t want to pay for heating and cooling rooms that they don’t often use. They also care whether a home is built sustainably, Roche said.
And while past generations may have wanted a dining room—to pack the whole family into for Thanksgiving dinners—this generation may figure that a multipurpose space is better, considering large holiday gatherings aren’t everyday affairs, he said.

Chris agreed. “They don’t want the old fashioned traditional formal dining room. They want to take the structure and make it their own,” she said. “A dining room can become a media room. There’s not the formality there was with the baby boomers,” she said.

Source: http://www.marketwatch.com/story/what-millennials-want-in-a-home-2014-09-15?page=1

 

My website: www.sandralew.com

Corporate offices of Google may expand into Playa Vista to the former massive Howard Hughes hanger where the "Spruce Goose" was built. It is a massive space of over 300,000 square feet. That would be exciting news for the area and a great addition for Silicon Beach. There are already many high tech and media firms in Playa Vista including Google-owned YouTube. This move would only attract even more to the area. This will also create an even greater need for housing in the area.

Google Eyes Giant Offices in Historic Los Angeles Airplane Hangar 

 

Google is eyeing an expansion in Los Angeles into a hangar where the “Spruce Goose” was built 

5:29 pm ET  Aug 26, 2014  By Eliot Brown

A massive former airplane hangar just north of Los Angeles International Airport was home to construction of the world’s largest airplane in the 1940s and then hosted filming for movies including “Independence Day” and “Transformers.”

Soon it could launch a new life: corporate offices of Google Inc.

According to multiple people familiar with leasing discussions, Google is eyeing an expansion of its Los Angeles facilities into the sprawling facility, a giant edifice built by Howard Hughes in 1943.

Today, the building is owned real estate developer Ratkovich Co. The company has converted the rest of the former Hughes Aircraft headquarters into modern offices filled with tech and media firms—including Google-owned YouTube—and it wants a big tenant for the hangar and attached buildings as well.

Google is in early discussions with Ratkovich about leasing more than 300,000 square feet to take nearly all the facility, the people familiar with the discussions said. The space would add to Google’s existing offices in the area, they said. Those include a Venice, Calif., outpost in an iconic Frank Gehry-designed office with giant binoculars out front.

The hangar was held for years by Howard Hughes’s Hughes Aircraft and was used to build the giant “Spruce Goose” aircraft. The company eventually sold its airfield and headquarters in the 1980s to make way for development. The hangar, known as Building 15, has since been used for some filming movies on occasion, but Ratkovich has been hoping to find an office tenant ever since the company bought the former Hughes headquarters in 2010.

It hasn’t been easy, in part because of its design. It is rather atypical—to say the least—for office space. The hangar has two bays that are 750-feet long—more than twice the length of a football field—and its ceiling is more than seven stories high.

In an interview, Ratkovich chief executive Wayne Ratkovich declined to comment on Google, but said generally that leasing at the overall property “was faster than we imagined, faster than we expected.”

The property is in the Playa Vista neighborhood of Los Angeles, which long struggled to attract companies. But in the past three years numerous tech, media and advertising companies have flocked to the area. That—in turn—has attracted other similar companies to look at moving there.

Interestingly, the area has far more of a suburban feel than neighborhoods in many cities that attract a similar type of tenant like the Union Square area of New York or South of Market in San Francisco, as Playa Vista lacks neighborhood coffee shops and instead has surface parking and large expanses of open space.

While tech companies with young workers have generally avoided suburban locations, other than Silicon Valley, the landlords in Playa Vista have gone to great efforts to boost the amenities aimed at young workers. For instance, Ratkovich has added surfboard racks and barbeque pits, and food trucks pull up to the area’s offices for lunch.

Source: http://blogs.wsj.com/developments/2014/08/26/google-eyes-giant-offices-in-historic-los-angeles-airplane-hangar/

 

My website: www.sandralew.com

Smart companies want innovative space so conventional office is going to have a hard time to compete. These new office spaces will be a magnet for creative firms. Modern buildings with contemporary design is in along with modern everyday conveniences like pet friendly work spaces, cafe, local gym with lots of fitness options for good quality of life. Maguire III a prominent developer is banking on the "fun" factor and it's working.

Prominent L.A. developer to build unconventional office at Playa Vista

 

The WE3 office planned for Playa Vista will feature vivid colors, concrete floors, operable windows and 14-foot ceilings. (Zoltan E. Pali)

By Roger Vincent - August 28, 2014 ; 5a.m.

Robert F. Maguire III, a prominent developer who helped shape L.A.'s skyline in the 1980s and '90s, is back.

Maguire led development of several of the city's best-known office buildings including U.S. Bank Tower, the tallest structure in Southern California. Now, at 79, Maguire says he is gearing up to develop again.

He plans to build an unconventional office at Playa Vista, the expansive former headquarters site of aviation titan Howard Hughes that has become a magnet for so-called creative firms such as YouTube.

The monolithic granite and glass towers Maguire built for corporate titans of the late 20th century are not attractive to technology, entertainment and digital media firms now leading the region's economic recovery, he says.

Smart companies want innovative space. Conventional office space is going to have a hard time competing. - Develop Robert F. Maguire III

 

"Smart companies want innovative space," he said. "Conventional office space is going to have a hard time competing."

The Playa Vista office market is roaring, in part because the tech-centric Westside, sometimes known as Silicon Beach, is running out of space.

"Santa Monica is full," Maguire said. "The obvious replacement for major tenants is Playa Vista."

His plan is to build an office called WE3, which would be the third building at an office campus called Water's Edge at the intersection of Lincoln and Jefferson boulevards. Maguire has held part interest in Water's Edge since he built it in 2002.

The complex, about a mile from the Pacific Ocean, was intended from the start to be a campus for creative technology types, but the timing was off. The roaring tech boom of the late 1990s was over by the time Water's Edge hit the market and it sat empty until video-game giant Electronic Arts Inc. moved there in 2004.

EA ran into financial challenges and labored to sublease much of its space, but Water's Edge is now at more than 90% occupancy, Maguire said. He plans to sell the complex to an investor willing to become a partner in the development of WE3.

"We are interested in joint venture so we can start the building on spec," he said, meaning that work on the $67-million building would begin before any agreements with tenants have been reached.

The design, by architect Zoltan Pali of Studio Pali Fekete Architects, calls for a vivid blue and red four-story building.

"There is color everywhere, inside and out," Maguire said. "It's in total contrast to conventional office space."

WE3 would have polished concrete floors, operable windows and 14-foot ceilings — about 60% higher than is typical.

Water's Edge already has an LA Fitness gym, a screening room, a cafe, a soccer field, a basketball court, a sand volleyball court and an Olympic-length lap pool.

"This really reflects the way people want to work and what progressive companies like to buy into in terms of space," Maguire said. "It's changed."

Demand has indeed been strong in Playa Vista lately. A former U.S. Postal Service hub on Jefferson Boulevard now called the Reserve leased 380,000 square feet in less than two years to such tenants as Microsoft, entertainment media company TMZ and content delivery network EdgeCast.

Landlords asked for nearly $3.25 a square foot per month in Playa Vista last quarter, according to brokerage Cushman & Wakefield. In downtown Los Angeles landlords asked for less — about $3.04 a foot.

One of Maguire's former partners, Ned Fox, says he didn't see the shift toward unconventional office buildings coming during the construction heyday that lifted the city's skyline.

"Back when we were building high-rises downtown in the late '80s early '90s we were performing research on how tenants were utilizing space," Fox said. "There was a lot of talk about the Information Age, but none of us knew what that really meant. We didn't appreciate that the way people work was going to radically change."

Technological advances eliminated the need for file cabinets, libraries and even offices and assigned desks. Many organizations became less hierarchical, Fox said, and now desire offices that enable managers and staff to quickly cluster in groups as they work on various projects.

"It's getting to the point where companies have learned how to make open space highly collaborative," Fox said, "where you can bring a lot of talent together."

Fox's firm Vantage Property Investors has converted an old Citibank research-and-development plant in Playa Vista into offices for creative firms. Dogs are permitted and tenants take breaks to play with the foosball and pingpong tables.

People don't need a lot of office space, he said, but "they do need breakout and relief space."
Maguire, who was known for his demanding personality in the past, will probably make WE3 work, Fox said.

"His tenacity and creativity may drive a lot of people nuts," Fox said of Maguire, "but he always ends up with something that is different and typically very good."

Maguire said he intends to build more beyond WE3, following the example of his grandfather, who practiced law until the age of 93, and his father, who flew planes until he was 80.

"We are coming up with something that is totally different than we are used to building, which is fun," Maguire said. "When I stop having fun, I won't do it anymore."

Source: http://www.latimes.com/business/realestate/la-fi-property-report-playa-vista-20140828-story.html

 

My website: www.sandralew.com

Statistics are just that as may have little meaning when related to what's actually happening in a particular neighborhood. There is always a lag between contract and closing which creates an unavoidable minimum two month delay with reporting data. In a nutshell, just take the stats as a grain of salt.

Beware the shortcomings of data on home prices and mortgage rates

By Lew Sichelman - August 21, 2014 9:08am

It has been said that figures lie and liars figure. But even when the numbers are truthful, they often are nearly meaningless.

Take average home prices. They are widely reported by regional and local media, even though they are generally national in nature. Although it's nice to know that housing values throughout the country are up or down — or holding steady — the figures often have little meaning when it comes to what's happening on your block or in your neighborhood.

David Rathgeber, a northern Virginia real estate broker, says home price data are "recreational" rather than actionable. He also rightly points out that the figures quoted are usually old news, as much as four months after the fact, even though they are often mistakenly reported as this month's or last month's numbers.

Why such a delay? A two-month delay is "unavoidable," he says, "due to data collection limitation — the lag between contract and closing — and another month or two for data assembly, review, comment and publication."

Rathgeber also points out that "taking action" based on information that is two to four months old "can be a disaster."

Prices rise or fall in two ways — appreciation or depreciation — and according to the mix of sold houses.

If the trend has resulted from rising prices, sellers might want to hold firm on their asking price, even if the house is currently overpriced. It may be getting only a few showings, or perhaps none at all. But if prices are, indeed, rising, the seller can hold on until values catch up.

And if prices are falling, sellers will have to cut their inflated asking price by a rate greater than that of the overall market decline if they want to attract a buyer.

Buyers, on the other hand, may be willing to pay something above the asking price when home values are rising because they have a reasonable expectation that, in a few months, they will recoup their "loss." If prices are falling, buyers will have no sense of urgency because they expect greater value for their money in the future.

But beware: The average home price can change even when individual values do not.

That's because of the distribution of the properties covered in the price report. If more lower-cost houses than usual are sold in one particular month, the average price will skew lower. Similarly, if more than the usual number of expensive places change hands, the average will swerve higher.

And one more thing: The true average rarely changes more than 1% from one month to the next. So view reports that show values rising or falling more than that with skepticism. In Rathgeber's words, they are "patently meaningless."

Again, what's happening on a national scale usually has little significance to values in your neck of the woods. But even more important to note is that even though averages can be built for any ZIP Code and any month, the sample size is generally not large enough over a short-enough time to have any significance.

Generally, to calculate a meaningful average price for a particular area would require years of data, much of which would be so old that it would no longer be relevant. The actionable information today's buyers and sellers need must be fresh: what went down last week and last month, not years ago.

Although we are debunking myths about prices, let's take a deeper dive into two popular reports covering mortgage rates: one from Freddie Mac, the other from HSH Associates.

Freddie Mac, the huge secondary mortgage market company, publishes a widely quoted monthly report on the average rates for 30-year and 15-year loans. Its survey is an average of the offerings to "prime" borrowers from 125 primary lenders nationwide, large and small, for purchase loans with 20% down.

Even that much information is often more than gets picked up by news organizations. But how many people these days make that large a down payment? And who is a prime borrower? Freddie Mac doesn't have a definition, but reports that it is "not necessarily" someone who has never missed a payment and is always on time.

HSH, the New Jersey mortgage information firm, says its weekly average results from a survey of 600 "active" lenders who are in the market and able to make loans directly to consumers. Here, the survey asks lenders about their pricing for 80% loan-to-value mortgages to someone with a 740 FICO score or better.

This is the "stuff of normal humans," according to the company's Keith Gumbinger. But again, do you fit that bill? If not, you can expect to pay more than what's reported in the media. At the same time, because Freddie Mac's and HSH's numbers are averages, you might be able to find lower rates.

This is not to damn either Freddie's or HSH's surveys — or any of the pricing surveys, for that matter. Rather, the point is this: Take all that's reported with the proverbial grain of salt. Do your own sleuthing and you just might do better.

Source: http://www.latimes.com/business/realestate/la-fi-lew-20140817-story.html

My website: www.sandralew.com

Mortgage rates at lowest level in 2014. Fixed mortgage rates have continued to fall.

Mortgage rates at low for year; 30-year averages 4.12%

 

A home for sale in Huntington Beach. (Bryan Chan, Los Angeles Times)

By E. Scott Reckard - August 14, 2014 8:15am

The cost of getting a home loan has slipped back to the lowest level of the year, with Freddie Mac pegging the average rate for a 30-year fixed mortgage early this week at 4.12% compared to last week's 4.14%.

The average rate for a 15-year fixed-rate mortgage was 3.24% compared to 3.27% a week ago, according to Freddie Mac's weekly survey of what lenders are offering to low-risk borrowers.

Freddie Mac's report, released Thursday morning, showed the start rates for adjustable mortgages edging slightly higher.

Freddie Mac, the big government-sponsored buyer and guarantor of home loans, surveys lenders across the country each Monday through Wednesday morning, asking them about the terms they are offering on loans to solid borrowers with 20% down payments.

The borrowers in this week's survey would have paid 0.6% of the loan amount in upfront lender fees and discount points to obtain their loans. Paying higher points can lower the interest rate.

Fixed mortgage rates, which started the year at 4.5% with expectations they would rise, have surprised economists by falling instead.

This week's 4.12% for a 30-year loan equals the low recorded for a week in May and then for a week in July, Freddie Mac said.
Borrowers with unblemished credit often pay less than the rate Freddie publishes.

For the past month, these borrowers who pay 1% of the loan amount in upfront points have been getting 30-year fixed loans at 3.875% and 15-year fixed mortgages at 3.125%, said Jeff Lazerson at the Mortgage Grader brokerage in Laguna Niguel.

Source: http://www.latimes.com/business/money/la-fi-re-freddie-mac-mortgage-rates-20140814-story.html

 

 

My website: www.sandralew.com

Homeownership is now at 64.8%, the lowest level since 1995. This in part due to average credit scores required of borrowers being far above historical norms which is a major hurdle for many first-time, minority and moderate-income buyers. FICO scores averaged a high 755 in June. Higher scores indicate a lower risk of default. The scores play a powerful factor in qualifying to obtain a home loan thus one of the major obstacles for new homebuyers even if they may be creditworthy and should be eligible to buy a home.

Mortgage lenders may be easing credit score requirements slightly

By Kenneth R. Harney - August 3, 2014  5:00 am

Are mortgage lenders finally loosening up a little on their credit score requirements — opening the door to larger numbers of home buyers this summer and fall?

It depends on what type of loan you're seeking. If it's a Federal Housing Administration-insured mortgage, the answer is a resounding yes. The average FICO credit scores for approved applicants for FHA home purchase loans have been dropping steadily this year, according to new data from Ellie Mae, a Pleasanton, Calif., company whose mortgage origination software is used by most large lenders.

But if you're shopping for financing in the much broader conventional market — where most mortgages are bought or guaranteed by giant investors Fannie Mae and Freddie Mac — scores have not budged for months. FICO scores averaged 755 in June, the same as in January, 4 points below their average for all of 2013. FICO scores run from 300 to 850; higher scores indicate lower risk of default.

Though credit scores represent just one factor that lenders use in determining whether to grant an applicant a mortgage, today's average scores required of borrowers are far above historical norms and represent a high hurdle for many would-be purchasers — especially first-time, minority and moderate-income buyers.

Phil Bracken, a mortgage industry veteran and founder and chairman of America's Homeowner Alliance, a nonprofit group that promotes affordable housing, calls current score levels "serious" contributors to a national problem: Homeownership is now at 64.8%, its lowest level since 1995, in part because so many consumers can't get past lenders' severe underwriting tests. The ownership rate for Americans under 35 is 36.2%, the lowest on record.

"There are lots of people out there who are creditworthy and should be eligible" to buy a home, Bracken says. Scores are not the only obstacle in their way, but they play a powerful role.

Leaders of both of the country's major credit score model developers — FICO and VantageScore Solutions — have confirmed to me that banks could reduce their scoring requirements from today's highs and not materially increase their risk of delinquencies and defaults. In the process, they would increase the volume of mortgages they make, spur more home sales and stimulate employment.

So what's holding them back? Interviews with top officials at lending institutions suggest something that may not be widely understood by consumers: Fear and finger-pointing are gumming up the system.

Lenders fear that big investors such as Fannie Mae and Freddie Mac will force them to buy back loans they make that have below-par scores or underwriting. Both companies have required lenders to repurchase billions of dollars worth of defective mortgages. In the process, they've made banks and mortgage companies hyper-obsessive about delivering pristine loans, even though that means rejecting borrowers they would have funded in the years before the housing boom and bust.
Anthony Hsieh, founder and chief executive of LoanDepot, a Foothill Ranch mortgage company that specializes in conventional loans, says his firm cannot afford the risks of deviating from the Fannie and Freddie guidelines — or even tiptoeing close to the line.

"We have no control over credit scores," he said. "Until [Fannie and Freddie] put out a directive telling us to provide credit to more Americans, our hands are tied."

Spokesmen for Fannie and Freddie say they have tried to ease lenders' fears about overzealous buyback demands and do not require scores to average 755 or anywhere even close. Both companies assess higher fees on loans they buy with credit scores below various thresholds — 740 FICOs and above get the lowest fees — but insist that they do not dictate scores. They also point out that many lenders set their own score thresholds higher than Fannie's or Freddie's, levying "overlays" that increase costs to consumers.

Despite all this, however, there may be glints of hope on the horizon at Fannie and Freddie on credit scores and other fees. Under its new director, Mel Watt, the Federal Housing Finance Agency, which oversees Fannie and Freddie, has reached out to lenders and asked for their advice on where to set some of the fees the two investors charge, including those connected with credit scores.

Though no one can predict whether this will help curtail the finger-pointing and fears that are keeping acceptable scores unnecessarily high, there's a real possibility. And that could be a big deal for buyers in the months ahead.

Source: http://www.latimes.com/business/realestate/la-fi-harney-20140803-story.html

 

My website: www.sandralew.com

Million-dollar-plus home sales grew at 9.1% statewide compared with last year. Demand for high-end homes is still growing as total overall sales sales fell 7.4%.  Affluent parts of the Bay Area and Southern California especially the coastal areas continues to draw a demand pushing up prices in those areas. Hot technology jobs in these areas also mints additional new millionaires who can afford expensive homes. This market behaves differently as it responds to its own set of criteria as these buyers are less likely to agonize over credit scores, income, job security, mortgage rates and down payments. Looks like the market is still sizzling as price increases grew at 11.6% over the past year.

Million-dollar home sales hit seven-year high in California

 

Sales of million-dollar-plus homes hit their highest level in seven years in the second quarter. (Tim Rue / Bloomberg)

By Tim Logan: July 31, 2014 , 12:12pm

The number of homes that sold for $1 million or more in California hit a seven-year high in the second quarter, and sales north of $2 million reached a new record.

That’s according to new figures from San Diego-based DataQuick, which tracks local housing markets in the state. They found million-dollar-plus sales grew at a 9.1% clip statewide compared with last year, while sales overall fell 7.4%.

Several factors are driving the high-end liftoff, market-watchers say.

One is the hot technology sector in the Bay Area and some affluent parts of Southern California, which is minting new millionaires who can afford seven-figure homes. Another is the 11.6% price growth in California over the last year, which means a house worth $925,000 last summer may be worth $1,032,300 today. And there’s the influx of international buyers, which is pushing up prices at the high end.

Then there’s that old saw that the rich are just different than you and me, especially in a time when credit is tight and the job market remains soft for many middle-income home buyers.

“It’s always fascinating to watch this part of the real estate market. It behaves differently, responds to its own set of criteria,” said DataQuick analyst Andrew LePage. “These buyers, especially those in the multi-million-dollar market, are less likely to agonize over credit scores, income and job security, down payments and mortgage interest rates.”

Of course, in the most desirable parts of coastal California, a million-dollar home is rather routine. Half of all homes sold in San Francisco County in June exceeded $1 million, according to DataQuick, and parts of Los Angeles and Orange counties regularly cross into seven figures.

The market for even higher-priced homes is even hotter. While there were more million-dollar homes being sold here in the mid-2000s than today, California in the second quarter set all-time records for the number of homes sold for more than $2 million, more than $3 million, more than $4 million and more than $5 million.

Source:http://www.latimes.com/business/realestate/la-fi-million-dollar-homes-seven-year-high-20140731-story.html