Market Trends

2020 California Housing Forecast

September 26, 2019

C.A.R. releases its 2020 California Housing Market Forecast

Economic uncertainty and affordability issues to subdue California home sales

LOS ANGELES (Sept. 26) – Low mortgage interest rates will support California’s housing market in 2020 but economic uncertainty and affordability issues will mute sales growth, according to a housing and economic forecast released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)

“With interest rates expected to remain near three-year lows, buyers have more purchasing power than in years past, but they may be reluctant to get off the sidelines because of economic and market uncertainties,” said C.A.R. President Jared Martin.

“Additionally, an affordability crunch will cut into demand in some regions such as the Bay Area, where affordability is significantly below state and national levels. These factors together will subdue sales growth next year.”

C.A.R.’s forecast projects growth in the U.S. gross domestic product of 1.6 percent in 2020, after a projected gain of 2.2 percent in 2019. With California’s 2020 nonfarm job growth rate at 1.0 percent, down from a projected 1.5 percent in 2019, the state’s unemployment rate will tick up to 4.5 percent in 2020 from 2019’s 4.3 projected figure.

The average for 30-year, fixed mortgage interest rates will dip to 3.7 percent in 2020, down from 3.9 percent in 2019 and 4.5 percent in 2018 and will remain low by historical standards.

“California’s housing market will be challenged by changing migration patterns as buyers search for more affordable housing markets, particularly by first-time buyers, who are the hardest hit, moving out of state,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “With California’s job and population growth rates tapering, the state’s affordability crisis is having a negative impact on the state economically as we lose the workers we need most such as service and construction workers, and teachers.”

In fact, according to C.A.R.’s 2019 State of the Housing Market Study, nearly a third (30 percent) of those sellers who planned on repurchasing said that they will buy their next home in another state outside of California — the highest level since 2005.

Older generations were more likely to buy outside of California as 37 percent of baby boomers and silent generation planned on repurchasing in another state, but only 30 percent of Millennial sellers planned to do the same

Whisper Listings? … is another way of saying ‘Available Off-Market!’

‘Whisper listings’ are one of the best-kept secrets in luxury real estate — and they give buyers exclusive access to real estate other people don’t even know about…

An $80 million mansion owned by a Mexican billionaire wasn’t selling, so it was pulled off the market and turned into a “whisper listing.” There’s a little-known world of “whisper listings” in New York City and most larger US cities and most exclusive real-estate circles. Word-of-mouth “whisper listings” give high-end buyers access to penthouses and homes that aren’t listed online, The New York Post reported. These secret listings reportedly include a $110 million penthouse in the Woolworth tower and an Upper East Side.

At 520 Park Avenue, one of New York City’s ritziest new buildings on Billionaires’ Row, only one residence is officially on the market: a full-floor, four-bedroom condo for $31 million.

But what you’d never know by scouring real estate listings is that the tower is also selling a 12,398-square-foot triplex penthouse for a whopping $130 million. To even know this penthouse exists, you’d have to be connected – and probably a billionaire. Some of the city’s most exclusive multimillion-dollar homes are bought and sold as “whisper listings” that you’ll only find out about via word-of-mouth, The New York Post reported.

These whisper listings include an $80 million mansion right across the street from the Metropolitan Museum of Art that’s owned by Carlos Slim, the richest person in Mexico. According to the Post, Slim unsuccessfully tried to sell the mansion for years and then took it off the market to instead be marketed through billionaires’ word-of-mouth.

In the historic Woolworth tower downtown, a five-floor, $110 million penthouse was briefly on the market in 2017 and then mysteriously disappeared. On the building’s website, the most expensive unit is selling for $18.8 million. But according to the Post, the $110 million penthouse is still on the market for those with insider knowledge – and those who have the cash.

According to Bloomberg, these whisper listings can also be a sneaky strategy for keeping properties off sites like Zillow, which displays price cuts and how long the listing has been on the market. It can also be a matter of privacy for wealthy individuals who don’t want to flaunt their size-able real-estate transactions.

“There’s so much talk today about income inequality and the 1% versus the 99%,” Jason Haber of Warburg Realty told Bloomberg. “There are people who would prefer to avoid any glare and would prefer to sell it off market.”

This trend of secrecy extends to the worlds of hospitality and fashion, too. At some ultra-luxury hotels, the most expensive and exclusive rooms aren’t posted online. They’re available only for well-connected clientele who know of the rooms through word of mouth and have the funds to pay for them, as Business Insider’s Lina Batarags previously reported. And then there’s Goyard, a two-century-old Parisian brand that does virtually no advertising for its products.

“Goyard’s prime press strategy is silence,” Hillary Hoffower previously wrote for Business Insider. “It forgoes any advertising, e-commerce, and celebrity endorsements. It rarely grants interviews and very occasionally makes products available to the mass market.” This world of secret spaces and products is clearly betting that in some cases, super-wealthy buyers want discretion and exclusivity above all else.

Real Estate Wire Fraud… It’s Real and It’s on the Rise!

Updated: October 2018

Homebuyers, beware: It takes the average single person 11 years to save for a down payment on a home, and in an instant it can be taken from you by hackers during your closing.

According to FBI data, there is a rise in real estate wire fraud as hackers target real estate brokers, title companies, and attorneys through phishing email scams that allow malware to monitor email and spot potential transactions.

When the prospective homebuyer is ready to close on their home and send money for a down payment, hackers send an email that mimics a bank or institution, and request the money to be wired through the click-through link. At that point, criminals attempt to direct the funds into multiple offshore accounts, where the money is difficult to trace.

In 2017, $969 million was “diverted or attempted to be diverted from real estate purchase transactions to criminally controlled accounts,” according to the FBI. And in 2016, the number of wire fraud cases jumped 480% from the previous year.

“We’ve noticed [these scams] growing three years ago and it’s been growing over that period of time,” says Melanie Wyne, senior technology policy representative of government affairs at the National Association of Realtors. “Three years ago, if I’d talk about this, only a few people in a room would raise their hands. Today, almost everyone raises their hand.”

The consequences for homeowners can be devastating. Scott Nadler, a mortgage broker at Loan Depot, said his client almost lost half a million dollars after her attorney’s email was hacked and the bank was instructed to wire money to the attorney’s escrow account, when in fact, it was going to hackers. The money was recovered but the hacker was never caught.

There are steps you can take to avoid your risk of hacking, Nadler says. Establish personal relationships with the people handling your home transactions, so banks and attorneys know who you are over the phone to double verify the transaction information and can confirm your identity before issuing funds. “Have a relationship with your banker, your attorney, so if you’re speaking on the phone, they know it’s you,” Nadler says.

The FBI recommends going so far as to make a code phrase over the phone to confirm and protect your identity. And whenever you communicate with, or send money to, a broker or attorney, make sure you’re uploading through a secure and encrypted platform and not your regular email, says cybersecurity expert Kevin Mitnick. Then call to confirm they’ve received your payments and messages.

Being vigilant of any suspicious activity can help protect you from losing your life savings—and your future home—to scammers.

Reprinted from Yahoo News | Alyssa Pry and Jeanie Ahn

Pasadena Housing Inspection Update

Presale Self-Certification Program to go in to effect April 1, 2019

Do you plan to sell your home after April 1st? If yes, please read on…

What is the Presale Self-Certification Program?

Pursuant to Ordinance No. 7337 and Pasadena Municipal Code Section 14.17, prior to the close of escrow for the sale of a single family house, condominium, townhouse or duplex, the owner is responsible for obtaining a Presale Certificate of Completion or a Presale Certificate of Inspection. The intent of the program is to improve the safety of residential properties by addressing major life and safety code violations. Properties meeting eligibility requirements for a Presale Certificate of Completion are eligible for self-certification. Properties not eligible for a Presale Certificate of Completion require a Presale Certificate of Inspection.

What is required to be eligible for a Presale Certificate of Completion?

The property must not have any open code compliance cases. In addition, the application for a Presale Certificate of Completion requires the owner to self-certify the following:

  • Property’s actual square footage of living space does not exceed LA County Assessor’s record by 10% or greater;

  • Property meets fire prevention, detection and exiting requirements; and,

  • Property does not have unpermitted construction, additions, conversions or accessory structures greater than 120 square feet.

  • For More Info and Access to the Online Application Click Here

5 Cutting-Edge Home Design Trends to Keep an Eye on in 2019

From farmhouse chic to ‘Wellness Real Estate,’ the styles and design trends you’re sure to be seeing everywhere

By Marian McPherson – Staff Writer

As the new year draws near, homeowners everywhere are thinking about how to refresh their abode — whether it’s buying a new set of pillows and throws for the living room or a complete renovation of a kitchen.

And sellers may be even more inclined to invest in a redo since something as simple as a fresh coat of paint can boost a home’s value by as much as $5,400, according to a Zillow report.

Before going total HGTV, HomeAdvisor home expert and smart home strategist Dan DiClerico says homeowners and sellers should realize that home design trends, unlike consumer fashion, tend to have a longer life since most people tend to do complete overhauls only every 10 to 15 years.

“In general, home design trends tend to move pretty slowly,” he said. “It’s different from the world of fashion where you have whole new clothing looks coming out every year.”

Houzz editor Mitchell Parker echoed DiClerico, saying it’s important to note that design is very personal and that often times a buyer not liking a kitchen backsplash or your bedroom’s paint color isn’t going to make or break a sell.

“For example, backsplash tile is a relatively low-cost project, and let’s say a future homebuyer was touring the kitchen and thought, ‘This backsplash really isn’t for me,’ I don’t think [the sale] is going to become a no-go,” Parker said.

With those ideas in mind, here’s what designers are looking forward to in 2019:

Black and White Kitchens

You can never go wrong with black and white (Photo credit: Marko Poplasen for Unsplash)

In 2017, Zillow Digs named tuxedo kitchens one of the top trends, and according to Parker, they’re not going anywhere soon. “It’s a cliche to say that black is back,” he said. “But it’s always classic and it’s always popular.” He says a black accent wall creates a striking contrast when matched with white cabinets and countertops.

Blended Spaces

Open up your living room with large, glass sliding doors. (Photo credit: Andersen Windows)

Blended spaces, the idea of connecting indoor and outdoor spaces, emerged in 2017 and is expected to really take hold in 2019 said Houzz’s Julie Noble. According to Noble, buyers are looking for kitchens that offer easy access to a backyard patio, which is perfect for entertaining. This is usually achieved by installing large, glass sliding doors. If your kitchen doesn’t allow for that, no worries — it works just as well in the living room.

Add a Pop of Color with “Living Coral”

Don’t want a wall full of Living Coral? Use it in your decor. Photo credit: Houzz

DiClerico says one of the easiest ways to bring life to a new space is through repainting. He says Pantone’s Color of the Year choices are always a good starting place for inspiration, and that Pantone’s 2019 choice, Living Coral, will be a favorite amongst homeowners. Not inclined to use such a bold hue? He says blues, greens, and pastels are also gaining traction.

Farmhouse Chic Exteriors

Create a farmhouse look with white siding. (Photo credit: Houzz)

Feeling a little country? Lucky for you, the farmhouse trend is going strong, especially with exterior home design. The board and batten method siding (gapped wide vertical siding boards with narrow overlying vertical battens to cover the gaps) gives your home a vintage, farmhouse look. Keep it fresh with gleaming, white paint and pops of dark-stained wood.

Not willing to invest in a new exterior? Bring the farmhouse look indoors with reclaimed wood, neutral color schemes with pops of green and blue, and geometric patterns.

Using Smart Home Technology to Improve Health

Samsung’s SmartHub fridge connects health and nutrition apps. (Photo credit: Samsung)

Home ProjeKt, a Hanley Wood Builder Concept Innovation and Learning program, says homeowners are increasingly looking for ways to improve their overall health starting with what’s in their homes.

“Hanley Wood’s research reveals a fundamental shift among consumers towards embracing a concept we call ‘Wellness Real Estate’ because they see their homes as an invaluable asset in supporting their physical and emotional well-being,” said Barbara Spurrier, managing director of the Well Living Lab, in an emailed statement.

Spurrier noted that homeowners are investing in lighting systems that help regulate sleeping rhythms, smart appliances that connect to health and nutrition mobile applications, and indoor food gardens.