BHAUS EIGHT January 2023 Newsletter

Hello community,

HAPPY NEW YEAR! What an amazing start of the new year with all the rain and snow California is getting. Our end of year took us to Mammoth Lakes and Colorado, both snowy locations with crisp cold weather.

As we start this new year, we are excited not only about our upcoming listings, but for all the options/possibilities that we are finding for our buyers and investors. The competition for the good deals is fierce, but market knowledge and tenacity are both keeping us ahead of the competition and allowing us to guide our clients as they navigate this market.

BHAUS EIGHT Properties (stay tuned for upcoming listings):

SouthBay Real Estate.

Southbay market slowed down slightly from last month and last year. We had an average home price of $1.176MM in December, down by 3% vs last month and 8% vs last year. While some months have looked promising with increasing inventory, December was down 35% in the # of new listings vs last year, while DOM went up by 17 days vs last December.

Most of the cities we report on had slight drops in prices as well, while some increased in average and median prices vs last year. Redondo Beach went up +5%, Gardena +4%, Lawndale +26%, and PV Estates was up by +15% vs last year.

We have seen a lot of great value add properties coming in the market, and when priced right, they are getting snatched quickly by buyers who have been following the market closely as well as investors looking for value-add properties in the Southbay.

Home Stats by City.

Below are the snapshots of average home prices, # Sold listings, DOM, # New listings by city, inclusive of all types of properties (ie: Single Family Residences, condos, townhomes) compared to December of last year.

Economy & Mortgage News.

Positive news on the mortgage and housing market fronts. The new year kicked in with solid job growth and slowed wage growth, easing fears of higher inflation, and pushing mortgage rates down to a 4-month low.

December’s jobs report showed a 3.5% unemployment rate, with a healthy increase of 223,000 nonfarm payrolls added. The unemployment rate of 3.5% is at its lowest rate since 1969, according to C.A.R. research. Wage growth showed a 0.2% decrease month-over-month, indicating a possible slowing of wage growth which eases inflation fears and in turn, creates a positive sentiment when it comes to the Fed slowing down of its rate hike and thus, mortgage rate hikes. As of now, analysts are expecting mortgage rates to decrease throughout 2023, albeit not to the historically-low rates we saw in the years prior.

While mortgage applications were down 13.2% at the end of the first week of January, the 30-year fixed mortgage rate averaged 6.58%, marking lower than the October highs we experienced (with rates averaging above 7%). As of today, the 30-year fixed interest rate on a conforming loan is at 5.875%, while jumbo loans hovered around 5.125% (on purchase loans).

Investor Corner.

In order to best navigate this market, our community continues to rely on BHAUS EIGHT, their trusted expert, to find the right properties and negotiate the best deals in this challenging and rapidly changing market. As part of our bespoke service to our community, we are constantly on the look out for properties that we believe fit our clients’ needs, initiating conversations with our broker partners to find out all there is to know about the property, and how far a seller is willing to negotiate.

In addition to our quick initiative and grit when it comes to finding the right property, we make sure our community is educated with the latest news affecting them and their investments. Hence, we’d like to take this opportunity to highlight new laws affecting homeowners (below per C.A.R.’s President’s Message):

Prop 19 tax savings - According to a Los Angeles Times article last year, LA County had not processed applications for Prop 19 tax savings for over 1,200 eligible homeowners. This new law allows a homeowner to apply to have their property taxes deferred if the assessor has not completed its determination of the property’s eligibility under Prop 19. This is an urgency statute that took effect when the governor signed it in September. Taxpayers have until Jan. 1, 2024, to file for their deferment.

C.A.R. sponsored: "First Look" program for REO properties owned by large banks - This law creates a state equivalent of the federal First Look program, which gives priority to purchasers of foreclosed one- to four-unit residential properties who are prospective owner-occupants, nonprofits or public entities. During the first 30 days after a property is listed for sale, REO sellers may only accept offers from these eligible buyers. Moreover, REO sellers must "respond" in writing to any such offer received within the 30-day

In addition, this law prohibits bundled sales of such residential one-to-four properties. These properties must now be sold one at a time. The law applies essentially to banks that have foreclosed on 175 or more such properties in the preceding year. period.

C.A.R. sponsored: Residential housing may be built within areas zoned for office or retail with ministerial approval - This law, the Middle-Class Housing Act of 2022, allows a housing development project to be built on a parcel that is within a zone where office, retail or parking are the principally permitted uses.

The goal of this bill was not only to create more affordable housing but to do so without the necessity of public subsidies, income eligibility, occupancy restrictions, lottery procedures or other legal requirements applicable to deed restricted affordable housing. Moreover, builders and developers may proceed without cumbersome public hearings or CEQA (California Environmental Quality Act) environmental impact reports under a streamlined ministerial approval process. In the coming years, where large retail stores like Sears or Kmart have gone out of business, this law will make it possible for new residential developments to be built in those places.

C.A.R. sponsored: Partition action procedures under the Heirs Law - In 2021, the Uniform Partition of Heirs Property Act was passed, introducing a fair and rational procedure that allows owners to realize the full value of their property if a sale is ordered pursuant to a partition action. Among other things, it requires that in a partition action a court first mandate an appraisal and grant co-tenants an option to buy. If a sale is ordered, it must be a competitive open-market sale conducted through a broker, as opposed to a court auction. Finally, the broker's compensation must be set by the judge, and it must be reasonable.

However, this procedure was limited to "heirs property," meaning property owned at least in part by related persons. This law has now been expanded to apply to all persons who hold property as tenants-in-common, no matter how the property was acquired or whether such persons are related.

For any questions on the above mentioned laws please don’t hesitate to contact us directly.

Contact your BHAUS EIGHT team with any comments or questions!

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From BHAUS to yours.