selected by Jodi Summers
by Jodi Summers
Did you ever calculate how long you have to work and save in order to afford a home? Perhaps yes, perhaps no. Well, here’s a nifty little chart courtesy of The Atlantic Cities to help you figure it out.
Enjoy this calculation of how many years it takes to save enough for a down payment in Los Angeles or any of the 100 largest U.S. metro areas. The statistics come from factoring in local average wages from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages as well as local housing prices based on the median asking price per square foot of homes listed on Trulia.
The study estimated that people saving for a down payment set aside 10% of their pre-tax earnings and will earn an annual return of 1.5% on those savings. They assumed a 20% down payment, the minimum you can put down without paying insurance on your mortgage.
Notice that affordability varies hugely across metro areas. Sure, individuals have the potential to earn more money in most metros with higher housing costs – but those high wages usually aren’t high enough to offset the even higher housing costs. Among large metros, average weekly wages range from $655 in El Paso to $1809 in San Jose – almost three times as much. But median price per square foot runs from just $46 in Detroit to $459 in San Francisco – nearly ten times as high.
As you can see from the table below, in Los Angeles County, you’ll need to work 15.5 years in order to save enough for a 20% down payment on a typical 2,000 square-foot home costing $236 per square foot….It takes even longer in Orange and Ventura Counties….not to mention Santa Monica, were last month the average sale price is $660.38 per square foot for single family homes and condos combined. So, how long does it take to buy a home in Santa Monica? You do the math.
Buyers have realized that the housing market is in better health; and as a result are waving money at sellers in a rush to buy real estate. Buyers want the best value…as do sellers Sellers recognize that the upswing in the market will allow them to realize higher prices in the near future, so they are waiting; only the highly motivated are putting their properties up for sale. Demand is up, supply is down. Prices are on the rise. Summer transactions have been punctuated by a large number of cash money sales here @ the beach.
Numbers to make you smile. In August, it was a discovered that a total of 22,438 new and resale homes and condominiums were sold in Southern California. Year-over-year to August, total home sales were up by 14.2% and have been on the rise eight consecutive months. August sales figure were the most impressive for the month of August in six years.
In Southern California, the median price sale increased by 10.8% to $309,000 from a year ago. This was the highest median price recorded since August 2008. Prices for the bottom one-third of the region’s housing stock increased by 13.1% year-over-year, while the middle third rose by 6.1% and the top tier by 2.6%.
More good news for the high end? In August, sales of homes priced between $300,000 and $800,000 increased by 23.4% over the year, while sales of homes priced below $200,000 declined by 11.1%.
Look up. At our coast in Santa Monica and Venice, if we contrast Aug ‘11-to-Aug ‘12 –the median price of for sale properties rose 21% to $1,697,000 and the median price of sold properties hiked up 9% to $1,302,500. Celebrate with a walk on the beach.
The peak home-buying season is drawing to a close and history has proven that the market will taper off a bit through the election.
We’re here to help you with all your real estate needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – firstname.lastname@example.org or 310.392.1211, and let us move forward together.
by Jodi Summers
Everyone loves Santa Monica. The City knows it and has recently approved a transportation mitigation impact fee for new construction projects. The City Planning Commission estimates that the fee could raise $60 million for transportation projects over the next 20 years.
The transportation mitigation impact fee will help pay for transportation improvements to traffic, road conditions and other infrastructure. The new fees would apply to most new buildings — including single family homes — and would vary based on what kind of development is approved and where in city limits it occurs.
The fee splits Santa Monica into two areas. Area 1 includes Downtown Santa Monica, a special office district and the Bergamot Transit Village.
Area 2 encompasses everything within city limits not in Area 1, and the fees are higher because there are more vehicle trips in that geographic boundary. A new single family home built in Area 1 would pay an additional $7,600 as a part of this program. If the same home were built in Area 2, that amount would be $7,800. Multi-family housing would be assessed $2,600 and $3,300 per unit respectively.
Planners estimate the new fees would cover $60 million of the $119 million in raw costs of the various transit-oriented projects slated for the next 20 years, including bicycle, pedestrian, parking, public transit, auto network and other traffic demand projects.
Previously, for every dollar of general fund money used on transportation, Santa Monica got $9 from outside sources. Those include grants, state and federal governments.
As expected, commissioners also ensured that pet projects > including those initiated by local government, religious institutions and affordable housing > will likely be exceptions to the rule.
The SAVE Act, is new bill being proposed in Congress, would create 83,000 jobs and generate $1.1 billion in annual energy bill savings. Officially known as the “Sensible Accounting to Value Energy” (SAVE) Act, it would require mortgage lenders to include expected energy-costs savings into the value of a home. Bill sponsors, Senators Michael Bennet (D-Colorado) and Johnny Isakson (R-Georgia), call the bill, ”A win-win for the economy and the environment.”
The Institute for Market Transformation notes that SAVE Act would help revitalize the hardest hit sectors of the economy by providing lower rate mortgage financing for cost effective energy improvements; allowing homebuilders and homeowners to recover the cost of efficiency investments; and enabling better federal mortgage underwriting while lowering utility bills for American households.
“It would allow folks to retrofit their homes and be rewarded for it over the life of the loan,” Senator Bennet enthused.
Let’s put the SAVE Act into action using a recently built home as our example. Most likely the newer home is as much as 75%-more energy-efficient than its older neighbors > saving the owner $1,500 a year. Under the SAVE Act, that savings would be factored into the value of the home and the borrower’s ability to make the mortgage payments.
Expected benefits include:
* Enable federal mortgage programs to improve the quality of mortgage underwriting and provide an accurate picture of repayment risk and the expected costs of homeownership
* Greatly accelerate the supply of and demand for energy-efficient new homes
* Quickly return any incremental cost for homebuyers due to home efficiency improvements
* Put people in the construction and manufacturing sectors back to work renovating and building energy-efficient homes and products
“It allows us to build and sell more energy-efficient houses, which is a win-win,” shared Randy Melvin of Winchester Homes. “It’s good for us, it’s good for the environment, it’s good for the consumer, it’s good for our country’s energy independence.”
The average homeowner spends more than $2,000-a-year on energy, yet it is not factored into appraisals, unlike insurance or real estate taxes.
“Let’s say you install double-pane windows in your house that create energy efficiency, that’s a cost as homeowner, but it’s a savings that the lender can now recognize,” concludes Sen. Bennet.
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