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Home sales in mid-September have begun to pick up gains again. It's a sign the housing market is reaching an equilibrium after years of big swings which is better for realistic serious buyers. Home prices have been heading towards a better balance than in the past few years. Median price is up on average about 8.1% compared to a year ago with double digit gains. The market now has something to offer both sellers and buyers. It's prime time to get back in the market and when many do the market may pick up again.

Home sales post gains

 

Higher prices have pushed many investors and cash buyers out of the market, while still-low interest rates and an improving economy are luring more so-called regular buyers. Above, a home for sale in Long Beach. (Cheryl A. Guerrero / Los Angeles Times)

By Tim Logan - October 13, 2014 , 5:18pm

Home sales in the six-county Southland grew for the first time in a year in September as prices moderated from last year's torrid gains, according to figures out Monday.

The data are the latest sign of a housing market that's reaching equilibrium after years of big swings, economists say.

Today's home shoppers are more likely to find a less-crowded market with fewer intense multiple-offer situations and more serious, realistic buyers. - CoreLogic analyst Andrew LePage

 

Higher prices have pushed many investors and cash buyers out of the market, while still-low interest rates and an improving economy are luring more so-called regular buyers. And while prices aren't climbing at the 20%-plus pace of last year, they're still rising enough to keep sellers interested in selling.

"It seems like we're heading toward more of a balance," said Mark Gonzales, an agent with Redfin in West Los Angeles. "As long as we can get pricing right in line with people's expectations, we're in balance."

That balance helped drive the number of sales across the region up 1.2% compared with a year ago, according to San Diego-based CoreLogic DataQuick. It's a modest bump, but the first growth of any kind since September 2013, and a big swing from the 18% slide CoreLogic recorded in August.

Sales growth was strongest in Los Angeles and Orange counties, instead of in less-expensive markets farther east. And prices actually fell a bit, with the region's median slipping to $413,000 from its post-crash high of $420,000 in August.

Compared with a year ago, the median price is up 8.1%, and September was the first month in two years that none of the six counties CoreLogic tracks notched a double-digit annual gain.

The market right now has something to offer both buyers and sellers, said CoreLogic analyst Andrew LePage.

"There are still upward forces on home prices: Jobs are being created and families started at a time when the supply of homes for sale … remains relatively low," he said. "Today's home shoppers are more likely to find a less-crowded market with fewer intense multiple-offer situations and more serious, realistic buyers."

It's unclear, though, how long this equilibrium will last.

The California Assn. of Realtors last week forecast that price gains will keep slowing in 2015, and that sales will increase — after falling in 2014 — as buyers have a better chance to catch up to the new higher price points. But in a market in which many buyers struggle to afford a house, the prospect of higher interest rates is a constant threat, said the trade group's chief executive, Joel Singer.

"Any increase is going to have a substantial effect on the number of sales," Singer told a roomful of agents last week at the association's annual convention in Anaheim.

Right now, though, rates are as low as they've been all year. The job market is improving. Even gasoline prices are down, which is putting would-be buyers in a better mood, said Syd Leibovitch, president of Rodeo Realty. His firm, one of the largest brokerages in Southern California, is starting to see both prices and sales pick up again for deals that will close later this fall.

"It was really unexpected," he said. "August was a slower month. It seemed like homes were starting to sit and we were going into a more normalized market. Somewhere around mid-September it picked back up again. We started getting more multiple-offer situations."

Gonzales has been seeing things quicken too. Calls and visits to Redfin's website by prospective buyers were up 50% in September, and those house hunters are now out shopping.

"They were frustrated with the way the market was going. A lot of them took a break," he said. "Now it's a prime time to come back in."

And as they do, the pace of home sales should pick up even more speed, analysts said.

Source: http://www.latimes.com/business/la-fi-home-sales-20141014-story.html

My website: www.sandralew.com

Real estate is taking shape of a more traditional market for 2015 as we transition to a slower price appreciation environment. The slow down in price gains should help would be buyers to get into the market. It helps improve market affordability as housing inventory continues to improve and a modest uptrend for 2015 is predicted rather than in past few years of median home prices rising as much as 27.5 percent.

REAL ESTATE: Slower gains predicted in 2015 for home sales, prices

Boost in inventory will lead to modest upward trends, economist says.

 BY DEBRA GRUSZECKI / STAFF WRITER  Published: Oct. 7, 2014 Updated: Oct. 8, 2014 1:17 p.m.

Reset, California.

That could be the theme of a real estate forecast that California Association of Realtors chief economist Leslie Appleton-Young delivered Tuesday for 2015, as the real estate industry takes the shape of a more traditional market.

Next year promises to be far less frothy than it has been when it comes to price.

The association’s forecast is projecting a 5.8 percent increase in existing home sales in 2015 to 402,500 units. Median home price for California is expected to rise 5.2 percent to $478,700 in 2015, less than half the projected 11.8 percent rate in 2014.

Sales in 2014 will be down 8.2 percent from the 414,300 existing single-family homes sold in 2013, the state trade association said.

“We are transitioning into a slower price appreciation environment,” Appleton-Young acknowledged in a conference call.

The real estate scene going forward may seem dull, but is characteristic of a market that hit a tipping point after the rocket ride of 2013, she said. Median home prices rose 27.5 percent. Investors swooped in, scooping up foreclosure stock. Inventory was crimped. Cash was king.

That dynamic has significantly impacted housing affordability in California and forced some buyers to delay their home purchase, association president Kevin Brown said. Any slow-down in price gains will help would-be buyers get into the market.

“I don’t think it’s out of the question that within two years from now we could see some declines or retreats in terms of prices,” Appleton-Young said.

Appleton-Young said it may look ho-hum to some, but it will be a good pause for people who have gotten exhausted by multiple offers and competition in the past couple of years.

The percentage of properties fetching multiple offers has dropped to 53 percent from 70 percent in 2013, she said.

“We believe the change will be driven by the increase in inventory we are already experiencing, as well as improvement in the macro-economy and job creation,” Appleton-Young said.

The association predicts 3 percent growth in 2015 in the nation’s gross domestic product, up from 2.2 in 2014. “With the U.S. economy expected to grow more robustly than it has in the past five years, and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015.”
Source: http://www.pe.com/articles/percent-751496-appleton-home.html

 

State O' the Market : LA's Housing Market is Second Most Bubblicious in the US

My website: www.sandralew.com

Los Angeles's housing market seems to have stabilized for the time being yet it's still the nation's second most overvalued market.

LA's Housing Market is Second Most Bubblicious in the US

Wednesday, October 1, 2014, by Bianca Barragan

Does Los Angeles's housing market still feel way overpriced? It is, but at least it doesn't seem to be getting any worse (or better) right now. Third quarter results are in from Trulia, and they've found the LA market is holding strong at 15 percent "overvalued" (Meaning that the value of a house now exceeds its "fundamental value," based on "historical prices, incomes and rents." Don't consider the idea of "fundamental value" too long or you'll end up living alone in the desert.). That makes LA the nation's second most overvalued market, after Austin, TX, up from third place in the second quarter. LA is rising in the ranks mostly because the rest of the area is headed back toward reasonableness: Orange County was previously at the top of the list, but has moved down to number three, and the Inland Empire (Riverside and San Bernardino areas), last at number four, has slid down to number five. The slower gains in housing prices have likely helped those two regions tumble down the overvalued list, points out the LA Times.

Source: http://la.curbed.com/archives/2014/10/las_housing_market_is_second_most_bubblicious_in_the_us.php#more

My website: www.sandralew.com

US home sales hit its highest level in more than six years last month! This offers confirmation that the housing recovery remains on course. In August, the West soared 50% in sales to its highest level since January 2008. Despite the increase in sales, supplies have also increased giving buyers more choices as the market is reaching healthy levels of supply and demand.

U.S. new home sales at six-year high; supply increases

September 24, 2014 10:33 AM ET

By By Lucia Mutikani

WASHINGTON (Reuters) - Sales of new U.S. single-family homes surged in August and hit their highest level in more than six years, offering confirmation that the housing recovery remains on course.

The Commerce Department said on Wednesday sales jumped 18.0 percent to a seasonally adjusted annual rate of 504,000 units. That was the highest level since May 2008 and marked the second straight month of gains.

Economists polled by Reuters had forecast new home sales rising to only a 430,000-unit pace last month.

While the new home sales segment accounts for only 9.1 percent of the housing market, the increase last month should allay fears of renewed housing weakness after a surprise decline in home resales last month.

Existing home sales fell in August for the first-time in four months as investors, who have been supporting the market, stepped away. Some economists, however, think the departure of investors, who have been bidding up prices, is a positive development for housing.

A survey last week showed homebuilder sentiment hit its highest level in nearly nine years in September, with builders reporting a sharp pick-up in buyer traffic.

But housing continues to be hobbled by relatively high unemployment and sluggish wage growth.
In a separate report, the Mortgage Bankers Association said mortgage applications fell last week. The decline, however, followed a jump in the week ending Sept. 12.

U.S. financial markets were little moved by the data, but housing shares tumbled after home builder KB Home reported earnings that missed Wall Street's expectations.

KB HOME shares fell 6.89 percent, while Pulte Group slipped 1.74 percent. Toll Brother dropped 1.27 percent.

In August, new home sales soared 50 percent in the West to their highest level since January 2008.
Sales in the populous South increased 7.8 percent to a 10-month high. In the Northeast, sales rose 29.2 percent, but were flat in the Midwest.

Despite the rise in sales, the stock of new houses on the market hit its highest level in four years, giving buyers more choice. At August's sales pace it would take 4.8 months to clear the supply of houses on the market. That compared to 5.6 months in July.

Six months' supply is normally considered a healthy balance between supply and demand. The median new house price increased 8.0 percent in the 12 months to August.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
(c) Copyright Thomson Reuters 2014. Click For Restrictions - http://about.reuters.com/fulllegal.asp

Source: http://money.msn.com/business-news/article.aspx?feed=OBR&date=20140924&id=17958898

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A record number of younger Americans have been living with their parents, which has greatly reduced household formations in recent years. But as the economy improves, more are finally venturing out on their own. Growth has been greatest in the rental market. This generation has spent more per person than any other time opting for affordable rents rather than high home price purchases to start off with.  Renting is the first step to leaving the nest. Los Angeles leds the pack as one of the most desirable places for Millennials to live. 

Millennials start leaving Mom and Dad's nest

Diana Olick - Tuesday, 16 Sep 2014 | 12:59 PM ET

 

As the U.S. economy improves and adds jobs, younger Americans—millennials—are slowly starting to move out from their parents' basements, where a record number of them have been living for the past few years. They're not buying homes as much as they are renting them, but how much and where is crucial to know in order to understand where the housing recovery is headed.

 

Over the past year, all the growth in net household formations has been among renters, according to the U.S. Census. For those 35 years old and younger, their home ownership rate has fallen from 44 percent to 36 percent over the past decade, which is why construction of multi-family apartments is at the highest level in a quarter-century this year.

 

But back to that migration from the basement. How big is it? Millennials will spend $1.6 trillion on home purchases and $600 billion on rent over the next five years, more per person than any other generation with more of them opting for more affordable rents versus paying the big price tags to buy homes, according to a new report from The Demand Institute, a non-profit think tank operated by The Conference Board and Nielsen. Millennials will form just over eight million new households, albeit most of them rental households.  

 

One important difference between millennials and young adults in previous decades is the unique financial challenges of home ownership today, resulting from graduating into a weak job market with growing student loan debt," said Jeremy Burbank, a vice president at The Demand Institute and Nielsen. "Many millennials are open to alternative approaches to housing finance, including single-family rentals and rent/own hybrid contracts such as lease-to-own."

 

And where will millennials move? The locales are now trickling in. When it comes to big cities, who better to ask than the moving companies? United Van Lines tallied up the results of the busy summer moving season and found that Chicago, Washington, D.C., Atlanta, Boston and Los Angeles led the pack of the most popular moving destinations. Washington also ranked as the No. 1 city that people are leaving, but such is the transient nature of the top political town.

While those are the major metropolitan markets, some millennials are looking for mid-size cities with great quality of life. Where should they go?

Top 5 livable cities, where millennials might consider moving

Rank	City	Population	Median household income	Median home price
1	Madison, Wis.	234,586	$53,958	$217,500
2	Rochester, Minn.	106,903	$63,490	$165,300
3	Arlington, Va.	209,077	$102,459	$577,300
4	Boulder, Colo.	99,177	$56,206	$489,500
5	Palo Alto, Calif.	64,514	$122,482	$1,000,000

Source: Livability 

 

Madison, Wisconsin; Rochester, Minnesota; Arlington, Virginia; Boulder, Colorado, and Palo Alto, California, are the top five most "livable" small to mid-size cities, according to a new report from Livability.com. Researchers there looked at 2,000 cities and their amenities, demographics, economy, education, health care, housing and transportation.

Millennials will drive the future of the housing market, and while they may have just started to move out of Mom and Dad's house now, investors should know where they're headed.
—By CNBC's Diana Olick.

Where people moved to this summer

Rank	City
1	Chicago, ll.
2	Washington, D.C.
3	Atlanta, Ga.
4	Boston, Mass.
5	Los Angeles, Calif.

Source: United Van Lines

 

The report found the millennials do aspire to home ownership, just as previous generations did, and they will be important drivers of the housing market. The difference between them and other generations, however, is that their time horizon for home ownership will be shorter, and their aspirations have been altered somewhat simply by the fact that they came of age in the Great Recession.

Where people moved from this summer

Rank	City
1	Washington, D.C.
2	Dallas, Texas
3	Atlanta, Ga.
4	Houston, Texas
5	Phoenix,	Ariz.																																						Source:	http://www.cnbc.com/id/102004872

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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

 

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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/