Southern California Real Estate Statistics

Malibu Real Estate Market Continues Explosive Growth

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view from Duma Point, Malibu California, USA

Malibu Real Estate Market Continues Explosive Growth

Malibu landFrom the days of agricultural ranching to Surfing USA and today’s growing tech industry, one thing remains constant. Buyers consistently clamor over beachfront Malibu real estate. Malibu’s luxury home market offers everything from oceanfront cottages to palatial estates with stunning views of the Pacific.

SoCal Homes Sell Regardless of Higher Prices

Prices have been going up for six years. Yes, the median home price in Southern California continues to rise. Home prices are setting records. The median price jumped 8.4 percent year-over-year in March 2018. Low inventory causes bidding wars that drive prices up. Residents fight development along the California beaches. This creates greater demand for existing properties.

How Does the Malibu Real Estate Market Compare?

Luxury sales of Malibu real estate spiked in relation to the it overall Los Angeles home market. MansionGlobal.com (04/24/18) underscores the “ultra exclusive Malibu Beach neighborhood, aligned with the multi-million-dollar homes of celebrities and business tycoons.” The publication noted 24 sales during January, February, and March 2018 – up from 6 year-over-year.

Let’s look at Malibu. Money is no issue for wealthy buyers who just want an idyllic setting and their homes or neighborhoods of dreams. Malibu beachfront estate is selling for $110 million – the most expensive home ever sold in Los Angeles County. Another Malibu sale referred to by Mansion Global is a Carbon Beach estate that sold for $85 million.

Certainly, prices like that drive median home prices up! This year, the median price in Malibu was $2.45 million and in Malibu Beach itself, the median price weighed in at $4.75 million. Prices may all even out in the wash though. The average Malibu home sold ended up absorbing a 17.5 percent price cut.

For the Long Haul

Price tags may be inflated. The rate of price hikes may not last long, especially with rising interest rates. So far in 2018, the average 30-Year fixed mortgage went from approximately 4 percent to approximately 4.5 percent. Pretty soon, sellers will notice the need to lower prices to accommodate higher costs for buyers. In Malibu, lower priced luxury properties sell very quickly.

Real Estate Agents – Southern California Homes for Sale

For information about Malibu real estate and luxury properties for sale in Southern California, please call Bob Cumming of Keystone Group Properties at (310) 496-8122.

Median Home Prices for L.A. Homes Top Record

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Median Home Prices for L.A. Homes Top Record

Do you know median home prices for L.A. homes broke the previous record in May 2017?  The 2007 record for median home prices in Los Angeles County was $550,000.  Last month the median home price in Los Angeles County finally reached a record breaking $560,500.  It took a decade.

L.A. homes for saleA recent report by CoreLogic, a real estate research firm, sheds light on the details.  The median home price rose 6.8 percent year over year in May.  Sales increased 4.8 percent.  And how about the sense that home prices and interest rates will keep going up so buyers should get off the couch.  After all, the high rents seem like a waste of money.

Why Now?

There are several contributing factors to the increasing home prices.  Better jobs and low interest rates are two main factors.  How about the competitive market?  There is a shortage of L.A. homes for sale, at least in lower price categories.  That is causing bidding wars for in-demand neighborhoods.  Bidding wars drive up sales prices.  Competition is so stiff that buyers are marketing themselves to appeal to the sellers and cinch the sale.

Can Buyers Afford these L.A.  Homes?

Adjusted for inflation, today’s record is 11 percent below the 2007 record.  The Los Angeles Times newspaper reports that only 9 percent of L.A. County households could afford the median-priced house at the end of 2006.  Now 29 percent can afford it.

The Times also cited the Joint Center for Housing Studies at Harvard University.  Almost 36 percent of homeowners in Los Angeles and Orange counties spent over 30 percent of their income on housing in 2015.  Compounding the problem, almost 17 percent spent over 50 percent of income on housing.  Thirty percent of income spent on housing represents a challenge to homeowners.

Some buyers won’t or can’t pay these high prices.  They search other locales or hold out for something better.  Others feel like they must move ahead or get left behind.  The Times article explains:

“In the wealthy beach cities of Manhattan, Hermosa and Redonda, buyers are forging ahead, convinced that if they back out now, “It will only be tougher.”

Buying and Selling Southern California Homes

For information about luxury L.A. homes for sale, call Bob Cumming of Keystone Group Properties at 310-496-8122.

Competing in the California Homes Market

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California homes sales in the $1+ million range juxtapose homes priced under $500,000.  For 2017 Q1, fewer homes priced under a half million dollars were on the market.  And more than the usual number of $1+ million homes sold.

Why Trend towards Luxury Homes

california homesLet’s define luxury homes here.  Prices over $1 million ranges from beach cottages to palatial estates.  In Southern California, we’ re not just looking at castles.  Many home prices in San Jose, Los Angeles, and San Diego are rising because of build out.  There are few places to develop on the ocean or in the mountains.

Although we never know for sure all causes for certain events, we can scan the horizon for some of them.  Let’s discuss some major components.

  • The exalted stock market is handing out more cash.
  • Job growth and higher paying jobs are available.
  • More employees want to live close to their companies and amenities.
  • Investors are turning money into real estate investments.
  • Consumer confidence.
  • Interest rates remain low.
  • Inheritances from the “savings minded” generation are in play.
  • Location in a pricey area may be more important than features of a home.
  • Price appreciation is pushing more homes over $1 million.

Stats for Luxury Homes Q1 2017

Let’s turn to the May 17, 2017 article by Andrew LePage of Core Logic.  “California Million-Dollar Home Sales Climbed to a Q1 Peak as Stocks Soar.”

Approximately 11 percent of the total homes sold for $1 million or more.  To be more exact, 10,562 buyers purchased homes priced at $1 million or more during Q1 this year.  The record in this category was set last spring.  Almost a third of the buyers paid cash.

The average luxury home size was 2739 square feet, four bedrooms and three baths.  The average lot size was 17,368 square feet.  The 92620, 92130, 95125, 92037, and 92651 zip codes saw more $1+ home sales than others.

Over 2500 buyers purchased homes priced over $2 million this winter.  Cash was the means of exchange for 43 percent of these properties.  The record of 3,508 sales $2+ million was set 2016 Q2.  We’ll see what happens during Q2.

Stats for Homes Priced below $500,000

On the other end of the spectrum, we see more homes appreciating and moving out of the under $500,000 range.  Sales in this category plummeted to arrange not seen since 2008 Q 1.  After all, there are fewer homes available to buy in this price range.  Inventory is tighter than ever.  Even so, almost 60 percent of total homes sold during 2017 Q1 were priced below $500,000.

Buyers searching for real estate priced under $500,000 compete with a new cash flow.  In areas with great demand, the availability of money is driving up prices.  So, it is good to prepare for the unexpected bidding war.

Buying and Selling Southern California Homes

For information on luxury California homes for sale, call Bob Cumming of Keystone Group Properties at 310-496-8122.

Beverly Hills Real Estate Market 2017

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Beverly Hills Real Estate Market 2017

bevely hills real estate marketGangbusters! Median Home Prices in the Beverly Hills real estate market have been soaring. How about 10 percent in a year. The Median List Price is $4.4 million.  The Median List Price in 2014 was only $3 million.  The price per square foot is $1000. The Median Closing Price is $2.5 million.  If prices rise too high and the demand decreases, the Beverly Hills homes market could be affected.  Home prices could indeed stabilize as interest rates rise.

Presently, there about 275 homes and condos are for sale in Beverly Hills.  It’s a seller’s market and the tax rate also favors sellers.

Interest Rates

Buyers are taking advantage of the low interest rates, rates that are only increasing very slowly.  Interest rates on a 30-year fixed mortgage average about 4%.  But quite a few buyers in Beverly Hills pay cash.  These affluent buyers are not much affected by changing interest rates for mortgages.

Why Beverly Hills Home Prices are Up

bevely hills real estate marketSeveral reasons for the rising prices in Beverly Hills come to mind. Beverly Hills features an excellent central location with fantastic views.  It is easily accessible to the Pacific Ocean and Interstates 101 and 405.  The stunning Santa Monica mountains are immediately west of the city.  So, there is substantial demand for real estate in prestigious Beverly Hills, Bel Air, and the surrounding areas.

Los Angeles Real Estate Market

Putting the Beverly Hills market in perspective, home prices are also up throughout Los Angeles and in the state of California.  Prices in Los Angeles rose 7.8% in 2016.  But these home prices are only now returning to pre-recession values, as per Zillow.  Forecasters expect the trend of rising home prices to continue in the Los Angeles area.

Can People Afford to Buy Homes?

Many homes are priced out of the reach of buyers.  In fact, only about a third of Californians own their own homes.  Few real estate bargains can be found.  The inability of potential homebuyers to qualify for mortgages sustains the rental market.  And it adds value to investment properties.  The rental market is booming.

Improving Incomes

Employment is steady and improving.  But are salaries keeping up with the rising home prices in Beverly Hills and Los Angeles?  There may be more qualified buyers. As some of the Dodd-Frank regulations are loosened, borrowers may find fewer restrictions in the mortgage market.

Into the Future

bevely hills real estate marketWhatever we guess about the market, the months of January and February are not necessarily accurate indicators of the yearlong markets.  We can reasonably surmise that lower priced properties will be snatched up quickly while some of the gorgeous mansions in the Beverly Hills real estate market could take some time to sell.  Cash buyers and luxury investors, time to make your offers on these treasure homes.

Real Estate Agents Beverly Hills

For information about homes and condos in Beverly Hills and coastal California, please call Bob Cumming of Keystone Group Properties at 310-496-8122.

Southern California Homes Market Still Sees “Good Signs”

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Southern California Homes Market Still Sees “Good Signs”

Some bemoan the rising prices of Southern California homes for sale and slower sales. Think again! We’ve come a long way since 2007. At that time, median prices for homes within the six-county area of Southern California’s real estate market reached a record of $505,000. For perspective, the median price today for new and existing homes and condominiums is chugging along at $415,000.

Home Prices Up

Home prices have been increasing rapidly in the last two years – possibly too fast. When interest rates were at two and three percent and investors were buying up the market, home inventory diminished dramatically. Properties with popular price points disappeared. And luxury homes in Southern California were also picked up readily.

Prices are still rising but at a more modest rate. Consider the equation if the annual gains of 20 percent experienced last spring should have continued over the past year. Prices would be outdistancing income opportunities. They already are. And because the housing bubble created such a bitter aftertaste, we agree with Andrew LePage, analyst at DataQuick market tracker in La Jolla. Stats showing slowly increasing prices and better economic indicators are “good signs.”

Sales Down

Sales have been affected. DataQuick reported sales in June 2014 down 4 percent compared to June 2013. After spiking in spring 2013, the rate of homes sales has been for the past nine months.

Several factors are responsible for slower sales. Higher home prices. Higher interest rates. Lower inventory. Tighter lending. Economic uncertainty. Fewer investor purchases. Fewer foreclosures and short sales. But look up! Approximately 40,000 homes were sold in California during May and June 2014. Even though that’s below the 25-year average of almost 50,000, sales are far better than they were a few short years ago.

Buying and Selling Southern California Homes

It is still a good time for buyers as well as sellers. Interest rates remain near historic lows and we don’t know how long they can be held down by the Fed.

For more information about opportunities to purchase Southern California luxury properties and real estate, call Bob Cumming of Keystone Group Properties at 310-496-8122.