BHAUS EIGHT July 2023 Newsletter

Hello community,

Summer travels are in full swing for many of us, as the weather continues to heat up! For those staying home, lots of fun is to be expected as well. The International Surf Festival is coming to Manhattan Beach Aug 2 - Aug 6, which includes a youth sailing event, the volleyball 6-Man tournament, surfing and paddleboarding events, and pier to pier races.

We have been busy working with our clients who are either just getting ready to get their homes on the market (for a fun fall selling season), and with our buyers who are eager to find their dream home.

Somewhere in between, our team is finding time to catch sun rays, go glamping, and plan our late European vacation (more to come later!).

In this month’s newsletter,…

• The Southbay Real Estate section has the latest local stats and trends, giving you all the info needed to get your home on the market

• Home Stats by City

• The Economy & Mortgage News has the latest updates on inflation, consumer spending, and up-to-date mortgage rates.

• Investor Corner continues with our “Buying Abroad” series - this time we are spilling the croissants about buying property in France!

  Have you followed us yet? make sure you are following us on Instagram and/or Facebook to get updates that are not sent to our mailing list! These updates include Open Houses, quick stats, inspiration for your home and your travels, as well as our exciting house viewings!

SouthBay Real Estate.

Last month we continued to see a dip in the average and median prices of homes and condos throughout the Southbay. The slight slowdown of the market is also evident in the reduced number of homes sold, the increase of the DOM (average days on market), and the dip in new listings coming into the market (exacerbated by the higher interest rates with many sellers staying put regardless of their desire to move). However, because our supply continues to not meet the higher high demand, some areas and certain price ranges are still demanding multiple buyers/offers and homes are selling above asking.

The average home price (across all types: SFRs, condos, townhomes) throughout all of the Southbay decreased by 5% vs last year, down to $1.34MM, versus $1.425MM last month and $1.4MM last year. The median price also fell by 5% versus last year to just below $1MM, coming flat to last month.

Among the cities that we report on, the beach cities had slight dips in median prices, while the inland cities of the Southbay had some increases in prices. These cities encompass Torrance, Hawthorne, Carson, and Gardena, and they all hover between $800K - $1.1MM price range.

We continue to see many fixers coming on the market, which are perfect for those who don’t shy away from some TLC, and perfect for investors as value-add properties to add to their investment portfolios.

Meanwhile, the market is still on the Sellers’ side, overall continuing to bring many qualified buyers when homes are priced correctly.

Home Stats by City.

Economy & Mortgage News.

Good news on the economy front, as the US seems to be more resilient than expected. According to C.A.R. research, economists are now lowering the odds of a recession occurring (or at least, the odds of a hard recession). While that is excellent news for the economy, the Fed just increased its interest rate by 0.25 pt, and it left the door open for another possible hike in the coming months in its plan to bring inflation down to a target 2%. Whether or not the Fed raises its rate again will depend on economic and financial developments in the next few months. Without the Fed loosening policy, mortgage rates may continue to remain high for a little longer.

On mortgage news, interest rates are hovering around 6.5% for a conforming 30-year fixed rate loan, while a 30-year jumbo fixed rate is at 6.250%. For investors, investment property may come above a point higher, with rates around 7.625% (depending on difference circumstances).

While elevated rates and limited supply continue to suppress the California market, the median price remained above $800,000 for the 3rd consecutive month. Heated market competition continues to be the driving force that helps put upward pressure on prices, and hence, any price drops we see in the CA market are slight ones.

The market is getting ready for the usual seasonal changes, where we expect a little more of a slowdown on the Fall. This will be a great time for both buyers and sellers, as there will continue to be less supply, but at the same time, less buyers (less competition) will be coming in the market. If you couple that with a decrease in interest rates that we are all waiting for, affordability will see a much needed improvement.

Even with high interest rates, if you are a buyer make sure to ask us about new federal programs that are just being brought to market. Our partner lenders have all the information you will need, including the federally-funded loan of up to $50,000 that can be used towards closing costs and/or downpayment, which becomes a grant if borrower stays in home for 5 years or more (this grant means it does not need to be repaid). Give us a call or drop us a line to get more information!

Investor Corner.

Continuing with our second home market chats, this month we are taking you to a one of our favorite places in the world, not only for their history, architecture, culture, and beauty, but also the food and the language! We are going to France!

Roughly around 5.8% of homes in France are owned by foreigners, with Brits accounting for 45% of these homeowners. Whether you are an EU or non-EU citizen, it is possible to own property in France, however, certain expenses such as property taxes and obtaining a loan. There are things you need to be aware of before starting your process so you can plan ahead, and we have a quick rundown for you here, courtesy www.expatica.com.

Whether you are approved or not for a loan will not only depend on your country of origin, but also on your intent to remain in France for the duration of your mortgage. Obtaining a residence permit will increase the chances of a foreigner obtaining a loan from a bank (although because of fiscal agreements between France and the US, it may be difficult for Americans to obtain a loan).

A notary will handle the transaction and will carry out the buyer’s due diligence. You should always look for a notary who specializes in “immobilier” (property):

• they are experts in local property taxes

• they will do your research, negotiate, and draft contracts, as well as advise you

• the notary will notify the purchase at the local town hall, which has 2 months to respond “droit de preemption” if it has reasons to block the sale

• It will take about 3 months from the moment you sign an initial sales agreement to getting your keys

  • If you pay cash, it can take about 2 months for the whole transaction to be completed

• once your offer is accepted, you have 10 days to review all paperwork, and this is your contingency period when you can withdraw with no issues

Fees to pay:

• Fiscal/admin fees (“promese de vente” contract): 125 Euro

• Deposit: once offer is signed, you will need to pay a deposit of roughly 5-10% of the property price through the seller’s notary (this is refundable within the 10-day contingency period)

• Notary fees (collection of local and regional taxes): 8% of property price (new homes are only about 2-3%). Notary will take about 1% of this fee

• Notary fees: between 0.5%-1% of purchase price

• Insurance: starts around 120 Euro/month, but will vary according to property type and value, location, and buyer’s profile

• Real Estate Agent Fees: seller negotiates and pays these fees, although they are included in property’s value

• Local Taxes: you pay 2 different taxes if you live in and own your home. The “taxe d’habitation” and the “taxe fonciere”. They vary from one area to another, so worth checking before choosing your place

• Condition: since there are many older buildings in France, seller must provide a recent official “diagnostic” detailing things such as energy performance to local risks of pollution - this will give you some idea of energy bills to come

• HOA fees: if you live in an apartment building, you will need to join the building’s syndicate - their annual fees will vary from building to building

Information from: https://www.expatica.com/fr/housing/buying/buying-property-in-france-101126/

We have partners in many international countries and can help guide you to the right local broker when ready. Don’t hesitate to call us with any questions before you start your search!

Contact your BHAUS EIGHT team with any comments or questions!

To subscribe to our weekly emails of investor opportunities and our digital newsletter, please email Sonia directly at Sonia@bhauseight.com

From BHAUS to yours.