A lot of people needed to get out of the house. The economy is in forward motion, there has been a positive turn in U.S. household formation and a rising demand for all types of housing, including multifamily and single-family rentals…but a lot of people who should be forming their own households are not.
Think of a house as one or more people who live in the same home. Before the housing bust, an average of 1.1 million new households were formed each year in the U.S.
Household formation plummeted during the Great Recession, as young adults moved in with their parents and older adults moved in with their children, people took in roommates. From the first quarter of 2008 to 1Q 2011, around 450,000 households formed each year. 2011 went back to the norm of 1.1 million and new household formation swelled to 2.4 million in 2012.but there’s more to come.
Pontificators believe there is still an estimated 2.4 million missing households that should be forming in the near future. For more than two years, housing permits, housing starts, resales and new single-family sales have been on the rise. Only household formation is still lagging.
Job growth is the primary driver for household formation and the steady employment growth of the past three years is another impetus for new household formation. Young adults between 18 and 34 years old are itching to get out on their own and start living their lives.
“You’re just seeing a lot more people getting reengaged,” said Sterne Agee analyst Jay McCanless. “Housing demand, whether its rental or ownership, is a positive indicator.”
Grow up. Go forth. Get on with your life. Good luck.
If you own real estate at the beach, life is like a holiday by the sea, today is good, tomorrow even better. As you enjoy the ocean, the equity just keeps on rising. Figure if California real estate is strong, coastal real estate is stronger. And, BTW, California real estate is good. We will soon be seeing more property millionaires.
The California Association of Realtors reports that the July year-over-year statewide median price increased by 29.8% to $433,760 (rah! Rah! RAH!). California strong. By, comparison, the national median price for an existing single-family home in 2Q 2013 was $203,500 – up by 12.2% from a year earlier.
Here at the end of the 10 freeway, the median asking price for Santa Monica and Venice residential properties is up 25% from August 2012, while the median price of sold properties is up 28%. These statistics reaffirm what we all know; the beaches are in multiple offer situations. And here’s a number to make property owners proud and buyers concerned – the median sold price is an eye-popping $1,495,000. Life is lucky @ the beach.
Life in California is good for those who can get it. Inventory of unsold single-family homes in California held steady over the month at a 2.9-month supply, down from 3.5 months a year ago. Inventories in Los Angeles County continue to be tight but eased over the month from 2.8-months in June to 2.9 in July. The desire to live at the beach, which has been escalating prices, is also squeezing inventory. Santa Monica and Venice have had a 27% drop in inventory in the past year. Sellers there’s money to be made.
Want it all in a nutshell? Here is a year-over-year summary of sales and price activity in Southern California by county:
Orange County: sales rose by 5.2% last month, while the median price increased by 22.5% to $675,000.
Riverside County: sales of existing homes fell by 7.6%, but the median price jumped by 31.5% to $294,300.
San Bernardino County: sales increased by 7.0%, while the median price climbed by 23.7% to $180,270.
San Diego County: unit sales moved up by 8.5% and the median price increased by 23.3% to $483,800.
Ventura County: existing home sales increased by 11.4%, while the median price rose by 28.3% to $545,720.
Mortgage interest rates edged up in July, but this has yet to impact home sales. The average rate for a 30-year fixed-mortgage was 4.37% versus 4.07% in June, and was up from the year-ago rate of 3.55% in July 2012.
For more information 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.
The application for the Civic Working Group is on line! Our job for the next couple of weeks will be to promote the link as much as we can to make sure that it reaches as many qualified applicants as possible. The Santa Monica Civic Auditorium needs a perfectly balanced team of experts!!! Have you ever been involved in managing, building, booking, restoring or financing an entertainment venue? Can you meet monthly to sketch out the bones of a viable plan to get the Civic Auditorium back in action? Do you know someone who qualifies or can you post the information on a website, Facebook page or twitter feed that might reach interested people? Follow this link for the official details and to file an application. Completed applications must be submitted by September 16. Santa Monica City Council will appoint the five positions on October 22, 2013.
edited by Jodi Summers
The City of Santa Monica is conducting a Zero Waste Survey and would like your input. The City has indicated that there are three different surveys and has provided the following instructions:
We have three different surveys; a Commercial survey, a Single family (house) survey and a Multifamily (apartment/ condo dwellers) survey. For us to gather the most relevant information, we ask that participants take the appropriate survey as relates to their situation. For example if someone lives in an apartment and is a business owner, we encourage them to take both the Multifamily and the Commercial surveys. Thank you very much for assisting us with this project.
Here are the links the City has provided, and participants may even be entered to win prizes such as a free kitchen compost pail, a pressure washing service or a bulky item collection service. Please pass this email to other Santa Monica residents. The City’s hope is to have surveys completed by September 30th. A few minutes of your time now can help improve our City.
Sometimes the government of the City of Santa Monica enjoys giving itself hurdles to straddle. In 2010, the last time that Santa Monica participated in the Urban Water Management Plan required by the state, SM city officials saddled themselves with a stringent goal committing the city to consume only 123 gallons per person, per day by 2020.
Come 2013, even in the face of major improvements to both public and private facilities, our town of 90,000 residents and upwards of 200,000 workers and visitors goes through 134 gallons per person per day. Getting down to the 123 figure is more than daunting — it may very well be impossible without making life uncomfortable for residents and businesses alike, said Gil Borboa, water resources manager for Santa Monica City Hall.
In case you haven’t noticed the improvements, housing is no longer bringing down the economy. Home prices across the 20 major U.S. metro markets were 12% higher in April than they were a year before, according to the S&P/Case-Shiller Home Price Index.
In California, between May 2012 – May 2013, the median price increased by 31.9% to $417,350, according to the California Association of Realtors. May marked the 15th consecutive month to post a year-over-year increase in median price, and was the largest year-over gain recorded since CAR began tracking this statistic in 1980.
In Los Angeles County unit sales declined by 2.2% over the year to May – due to constrained inventory – while the median price climbed by 29.4% to $365,990.
Santa Monica has the technology to offer more current statistics. When contrasting July 2012 to July 2013, the Median Sold Price in our City by the Sea has gone from $970,000 to $1,205,000 – a jump of $235,000, or 24%.
After invigorating interplay, the experts have calculated a different conclusion. They have decided that the current pace of growth – while unsustainable for long-term market health – is not yet problematic.
Today’s housing market is critically different from 2007. Homebuyers are offering larger down payments and opting for more stable loan products. Tried to get a loan lately? Mortgage-lending standards are stringent compared with the loose lending environment of years past. Plus, sexy low mortgage interest rates mean lower monthly payments, thus making it more affordable to own a home even though prices are rising.
Demand for homes is strong, but the lack of inventory is having a negative effect on sales. The inventory of unsold single-family homes in California has fallen to 2.6 months compared with 3.6 months a year ago. Inventories were even tighter in Los Angeles County with only a 2.5-month supply of homes for sale in May versus 3.6 months a year ago.
Santa Monica has seen a 46% drop in inventory since July 2012. Then end of July 2013 showed a 1.9 months supply of inventory. A 3-month supply is parity, so we’ve clearly fallen into a seller’s market.
“We think inventory levels on a year-over-year basis will probably flatten out by the end of this year. That will be the first time since 2007,” offers Errol Samuelson, president of Realtor.com. “I think you are actually going to see inventory growth on a year-on-year basis starting in the fall, but prices nonetheless will continue to appreciate.”
The wizards predict that this rapid growth will stabilize. They cite several variables, including increased inventory and higher mortgage rates, will slow the pace growth, which to be clear, is expected to stay positive over the next several years.
To buy and sell real estate, please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – email@example.com or 310.392.1211, and let us move forward together.
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