BHAUS EIGHT October 2022 Newsletter

Hello community,

Fall has arrived! While we had an amazing summer, we are starting to feel the magic of the autumn season (hopefully weather will follow!). Of course this is already a busy 2nd half of year, as we keep a close watch on the hurricane affecting our friends and family in the East Coast. Elections are also coming up in November, and our local governments have a lot of local issues that will be playing a role in this year’s ballots.

On a fun note, we are now only weeks away from Halloween and Dia de los Muertos! End of October is the official kick off to the Holiday Season and the team at BHAUS couldn’t be more excited! Please send us pictures of your Fall Harvest home decor so we can feature in our next BHAUS newsletter!

BHAUS EIGHT Properties:

SouthBay Real Estate.

While real estate markets are softening, our Southbay market continues to make some gains, even if at a slower pace. We’ve had home price increases versus last year and last month, mostly across the cities that we report on, with notable mentions of Manhattan Beach (+26%), and Rolling Hills Estates (+19%).

When looking back versus last year, the overall Southbay market had a slight 2% (-$31,000) decrease in average prices, while the sold listings and new listings went down by roughly 36%; the average price decrease was only 1% versus last month. However, on a city by city basis, all of the cities we report on had average price increases versus last year except for Inglewood North (down 7%/-$68,000), and PVE (down 22%/-$648,000).

As expected, the fall season will also contribute into the overall slowdown. September had roughly 15% and 36% decreases in listings versus last month and last year respectively. At the same time, DOM (average days on market) increased by 33% and 40% versus last month and last year respectively, creating opportunities for buyers to negotiate on the terms and the price of the homes.

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 July of last year.

Economy & Mortgage News.

The 30-year fixed rate mortgage averaged about 6.66% on week ending October 5th, slightly down from 6.7% the week before. While rates dropped ever so slightly, they remain quite high compared to a year ago.

According to Bob Broeksmit, President and CEO of the Mortgage Bankers Association, there was a 14% decline in mortgage applications last week versus the previous week due to the ongoing economic uncertainty, coupled with Hurricane Ian’s devastation in the East Coast.

Because of the higher fixed rates, an increasing number of borrowers are applying to ARM mortgages (adjustable rate mortgages), which are hovering around 5.36% (more than 1% point lower than the 30-year fixed rate).

Meanwhile, 263K jobs were added in September, reflecting a slowing pace with job growth and bringing unemployment rate back to 3.5% (on par with its 50-yr low level according to C.A.R.). Accordingly, the decelaration in job growth will somewhat alleviate some of the inflationary pressures in our economy, but the labor market remains tight.

Investor Corner.

Great news for homeowners who are thinking of selling their primary residence! “More Homes on the Market Act”, a bipartisan bill just introduced in the House, is asking to increase the capital gain exclusion amount on the sale of a primary residence from $250,000 to $500,000 for single filers, and from $500,000 to $1,000,000 for joint filers, indexing for inflation.

According to C.A.R., this bill will provide the necessary tax relief for California homeowners, particularly senior citizens, who have not been able to move because of the potential tax burden of selling their primary residence. For working Californians, this bill would be a welcome relief as home ownership is one of the biggest and most important life investments, and many families are “unable to cash in on the equity gained in their homes”. Stay tuned for more on this proposed legislation.

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.