Real Estate News, Tips & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

Jan. 15, 2020

A supply Problem...

For years,  there have not been enough homes on the market for sale.  With the calendar flipped to the second week of January in this new year 2020, the lack of inventory has been even more pronounced.  The active inventory is extremely low to start the year,  down 29% compared to the start of 2019.

Buyers have been frustrated in the past few years and are just as frustrated in this new decade.  The Los Angeles and Orange County housing inventory is half empty.  It is again,  tough for buyers to find homes that they like in today's market.  We started the year with 8,025 homes for sale in Los Angeles County m the lowest start since 2013 and 2018.  There were 11,350 homes to start 2019 - 41% more than January 1, 2020.  Buyers had a lot more choices a year ago! 

This trend of supply shortage started with the 2008 recession.  Ever since less and less homeowners have placed for sale signs in their front yard.  Builders are releasing homes slower.  Its been the trend for 12 consecutive years.  With interest rate at 5% late 2018 causing demand on the market to diminish, it looked like the inventory problem was easing off.  However,  this reverted quickly in March when the interest rate dropped back down to 3.625%.  Homes are more affordable, demand picked up, and inventory started to drop again. 

Here are some advise for buyers and sellers on the market:   

For Buyers:  Be Realistic from the start.  Do not hesitate to write an offer to purchase a home that you are interested.  There are not a lot of homes that will be on the market most of the year if the interest rate remains.  Buyers won't have to overpay for a home but may have to pay slightly above the most recent comparable.  

For Sellers:  Be Realistic in pricing.  Yes,  the sellers are getting more advantages because of a shortage of inventory.  However, the demand had also dropped with the supply, just not at as fast a pace.  Price does not appreciate rapidly.  Los Angeles County homes are projected to increase by 5% over the next 12 months.  So the price accordingly.  Price it at fair market value.  The better the price,  the more activities it will generate, and the more offers you will receive - giving you more leverage.  

 

Jan. 8, 2020

How do buyers determine value of a home

The market value of a home, by definition, is the price that is agreed upon by both the buyer and the seller.  Then how does a buyer determine how what the value of the home is and what price to offer?  

Simply put,  buyers determine value by comparison shopping.  They will look at the price of the home based on its features and benefit and they are going to compare it with other similar homes that they have viewed recently or have sold recently.  Features and benefits can be many things:  Condition, layout, size,  bedroom count, does it have a pool or not,  age of the home.

Let's put it into a few examples...

If two similar homes were both listed for sale with the same layout and both were listed for $500,000.  The only exception was that one had an upgraded kitchen, and the other one did not.  Which would you buy?  Most people would buy the one with the upgraded kitchen.  Why?  More "feature and benefit" for the same price. 

We will look at another scenario... 

Now, what if the home without the upgraded kitchen is listed for $400,000.  Which one is a better value?  You probably will say the one for $400,000 because most kitchen won't cost $100,000 to be upgraded.  

While no two houses are 100% identical but I think you can get the gist of what I meant by comparison shopping.  Buyers will buy the one they deem more "valuable".  The value does not always equal to lower price.  Buyers will buy the one that either gives them more features and benefit for the same price (better value because they get more for their bucks) or the one with the lower price (better value because they get to save some money and use it the way they want). 

This is why when pricing a home for sale,  one should not only look at price per square footage, or what has sold recently.  A neighbor with the same model and similar condition sold for $500,000 does not guarantee you will sell for $500,000 for your home.  If other homes that are listed also for $500,000 but has better feature and benefit than your home,  buyers would opt to buy those other homes and your home will be left on the market unsold!  This is especially true when there is a surplus of homes for sales in the area - more competition.

Jan. 3, 2020

What to Expect From the Upcoming Market Year

Now that we’ve reached the new year, what can we expect from the real estate market in 2020? Today I’ll share some predictions and how they might affect the market.

 

Many people have been wondering if we’re headed for a real estate bubble. Here’s what you need to know about that: There is no reason to expect a real estate bubble to hit this year or anytime soon.

 

We essentially hit the peak of the market in the summer of 2018, when interest rates surpassed 5% at one point. High prices and interest rates made homes less affordable, demand started to slow, and inventory started to build up. We didn’t see the market improving until March of 2019 when interest rates dropped to the mid-threes.

 

Even when inventory levels peaked in September of 2018, we had just shy of 100,000 homes for sale. When the market crashed back in 2008, we had 163,000 homes for sale. The low interest rates allowed some sellers to save $300 to $500 a month through refinances; others took advantage of interest rates and took equity out of their homes. Those people no longer have to sell and thus, they kept inventory levels low.

 

Another reason for our historically low inventory was due to builders’ behavior after surviving the market crash in 2008. They now construct homes in small batches, which makes it harder to catch up with the market demand.

 

   Ultimately, the combination of low interest rates, low inventory, and high demand is why we shouldn’t expect a bubble anytime soon.

 

Ultimately, the combination of low interest rates, low inventory, and high demand is why we shouldn’t expect a bubble anytime soon.

 

The first few months of 2020 will likely look similar to what we saw in the last few months of 2019. We’ll be in a slight seller’s market, which means that prices will remain relatively flat and sellers will have a shade more leverage when it comes to negotiating.

 

For buyers in the market, good homes will still be hard to come by since inventory is so low. That means if you see a good home, jump on it as soon as possible! You might run into a multiple-offer situation if you don’t get in quick enough.

 

For sellers, while it may not be the best time to sell your home out of the last three years, it will definitely be the best time to sell in the last 12 months. Consider putting your home on the market sooner than later.

 

If you have any thoughts or questions about the 2020 market to come, reach out to us. We would love to hear from you! We’re here to help.

 

Posted in Market Updates
Dec. 27, 2019

Three Main Factor buyers to consider when evaluating your home

When it comes to selling real estate,  we all want the highest dollar amount of the house.  Here are 3 of the main factors buyers consider when evaluating your home.  

1. Location - When it comes to real estate,  we all have heard " location", "location" and "location".  If you are in a good neighborhood, you got one of the most important factors taken care of.  Why is location important?  Getting top dollar is all about supply and demand.  Having a "good location" means your neighborhood is more desirable and thus more demand!  What is considered a "good location"?  The definition varies from person to person.  To some people, it may be a school district.  To other people, it may be a convenience to work.  Generally speaking, if your home is in an area with any of the following traits,  the demand will be higher:

  • Great School district
  • Easy access to freeways (However don't be right next to a freeway)
  • Convenience to market, shops, restaurants, or schools
  • Close to job opportunities
  • Safe
  • Beautiful and well-kept neighborhood

2. Presentation -  Selling real estate is a beauty contest and also a price war.  Presentation matters!  To maximize the demand for the home and get more people to like the home.  We have to understand that how you choose to live in your home is sometimes different from how you want the home to present to a potential buyer.  There are three main things to consider...

  • Neutralize - When it comes to selling your home and getting top dollar,  you want to appeal to as many buyers as possible.  Bold color, decors, or style may only appeal to a small amount.
  • Declutter - First impression matters.  Having too many things in your house not only makes your home looks smaller than it actually is.  Clutter may also appear busy or messy which can all potentially turn buyers away.
  • Depersonalize -  You want the buyer to be able to see them living in this house and personal pictures and artifacts will make it more difficult for buyers to do so.

Need help with some professional advice?  Check out the deal on Interior Design/decorating service on Groupon.  Click here

3. Pricing -  We talked about the beauty contest,  and now its the price war part.  Believe it or not, when a property is priced too high,  less buyers are going to see it.  A 5-10% difference in price may not sound like a lot too you but it can mean the difference in getting the home sold or having it on the market for a long period of time.  The industry standard tells us that if there are minimal showings in the first few weeks,  you maybe 10% over price.  If there are showings but no offers, you maybe 5% over price.  A well-priced home is usually sold within the first two or three weeks.

 

Dec. 27, 2019

When Is the Perfect Time to Make a Home Purchase or Sale?

When is the best time to buy or sell a home? Unfortunately, the answer isn’t very simple, and here’s why.

 

This time of year, I’m often asked whether it’s a good season to buy or sell homes. I don’t think the answer is necessarily that simple, and that’s because there isn’t exactly a “best time” to jump into the real estate market. Here are three reasons why:

 

1. Mortgage rates change more than home values: Interest rates fluctuate daily, and they change much more rapidly than the housing market. Even a small change in interest rates can make a huge difference in how much you’re paying overall.

 

2. Statistics only tell you so much: Market numbers are found in a large amount of data, and a lot of important details are lost when you simply look at these metrics.

 

3. Your personal circumstances matter: Everyone has their own reasons for buying or selling a home, and these reasons dictate when is the best time to do so. A home purchase or sale is a huge decision to make, and it’s usually not dependent on market trends.

 

When you’re looking to buy or sell, you’re trying to juggle your own goals with complex external factors like price and interest rates. Ultimately, there’s no simple way to find the perfect time to sell — it depends on you.

However, you can still make smart choices that help you decide when to make a deal. If you’re considering buying or selling a home soon, feel free to reach out to me. I can help guide you toward a decision that makes sense for your situation. Until then, I look forward to hearing from you soon.

Posted in Buyer Tips, Seller Tips
Dec. 19, 2019

Real Estate Market Update - What a difference a year makes!

Despite the weather cooling down locally in Southern California,  the house market is hotter than most people think and we are setting ourselves up for a 2020 that is heavily in favor of sellers.  

So much had changed this in a year!  We started the year cold in a buyers market with 69,674 homes for sale in our entire Multiple Listing Service (MLS) and since then it has dropped to to 52,372 homes for sale in December,  the lowest since January of 2008. With the demands holding relatively steady,  it has shifted the real estate market from a slight buyers market beginning of the year back to a slight seller's market today.  



December generally is the slowest month in real estate with less people selling and less people buying.  Both buyers and sellers shift their attention from housing to enjoy the holiday season.  Yet we are seeing bout 40% less homes for sell in December compare to same period last year.

So Where are the homes for sale? One word...Interest Rate.


With the mortgage rate dropping all year,  the housing market slowly thawed.  The thaw continued through Autumn market as the rates reached a three year low and remained at between 3.5% to 3.75%.  The dropping of interest rate boosted the demand. 

The lowering of the interest rate also affected home sellers in a way most people didn't think about.  With the interest dropping many of the home sellers decided to refinance their home and say on payment or they can now take some money from their home equity and upgrade their house.  They no longer need to or want to sell their homes.

So the dropping of interest rate not only increase the demand in the real estate market by boosting buyer activities, also cause the inventory to drop by giving sellers an alternative option to selling. 

Now,  it is important to remember that a slight seller's market means that homes are not appreciating or depreciating much at all. Sellers gains more leverage during negotiation as they see may see some multiple offers.  Due to the fact that the over activities are lower and only a slight imbalance,  thus price is not climbing. 

(Check out my video on how buyer's and seller's market are determined here) 


In short, this is what we know for 2020

1. Demand continue to improve caused by the continuing low interest rate

2. Supply to remain low due to sellers alternative to selling thru refinancing  

3. Home Builders not building fast enough to bridge the gap between supply and demand

 

We are starting to see a housing warm front in Southern California. 

Posted in Market Updates
Dec. 17, 2019

2019 Wrap Up

 

A 2019 wrap-up and a special thanks from me to you.

 

Can you believe we are close to the end of 2019? It’s the conclusion of a decade! 2019 has been a special year for me with many exceptional memories. I became a dad in December 2018, so this was the first full year I was a parent. What an understatement when people say that being a dad is the best thing that can ever happen to you!

 

I have grown so much in so many different areas both professionally and personally. Professionally, I was able to help many families achieve their real estate dreams. I also launched my YouTube channel to share my real estate knowledge with the world! I share tips, market statistics, and general information about real estate there. With videos, I’m able to reach more people than I was able to before, one at a time. It was thrilling to see my channel grow both on YouTube and Facebook. 

 


It’s the conclusion of a decade!


 

Today I wanted to take this opportunity to thank each one of you for being part of my real estate family. Thank you very much for your trust, support, and referrals. I hope I have more opportunities to help you, your family, and friends to achieve any real estate goals you have. Today I am also pledging that I will continue to improve the skills I have and the service I can provide you. 

 

During this holiday season, I hope you eat a lot, laugh much, and enjoy time with your family and loved ones. If I don’t speak with you before then, happy holidays! If you have any questions concerning real estate, please feel free to reach out to me by phone or email. I would love to help you. I look forward to seeing and speaking to you in 2020!

Posted in Videos
Dec. 5, 2019

What’s the Difference Between a Buyer’s Market or a Seller’s Market?

 

What determines if we’re in a buyer’s or a seller’s market? Find out today.

 

Today, let’s review some real estate terms that you may have heard before but not fully understood: Buyer’s market and seller’s market.

 

What exactly is a buyer’s market? A seller’s market? How are they determined?

 

Simply put, a seller’s market occurs when there are more homebuyers on the market than there are sellers. Due to the law of supply and demand, that gives the seller more leverage when it comes to negotiating. Common trends you’ll see in a seller’s market include getting multiple offers on a listing, quick sales, and price appreciation. Buyers will also have a harder time negotiating repair credits because they fear they may not find another home to buy or that prices will continue to go up.

 

   This is a tool that will help you decide how aggressive to be during negotiations, whether you’re buying or selling.

 

On the other hand, a buyer’s market occurs when there are more buyers on the market than there are sellers. In this type of market, there is yet another imbalance on the supply-and-demand curve; now buyers get the upper hand because there are more homes for them to choose from. In a buyer’s market, you’ll often see homes with longer marketing periods, fewer multiple-offer situations, price drops, and more canceled transactions.

 

Now that you know the difference between the two, how are they determined?

 

The condition of the market is determined by the absorption rate, or the months of inventory that is available. If you’re not a fan of math, take a deep breath because calculating the absorption rate is very easy:

 

For example, assume there are 100 homes on the market for sale, and that 25 homes sold in the last 30 days. To get the absorption rate, you simply divide the number of active listings by the number of homes that have sold in the last month. In my example, you’d divide 100 by 25, meaning that you’re looking at four months of housing inventory.

 

If there are less than four months of inventory available, we’re in a seller’s market. If there are more than six months of inventory available, we’re in a buyer’s market. Anything in between is an indication that we’re in a neutral market.

 

This is a tool that will help you decide how aggressive to be during negotiations, whether you’re buying or selling. What type of market do you think your city is in right now? Send me a message and let me know!

 

If you’d like to learn more about this topic or other real estate trends, feel free to reach out to me as well. I’d love to hear from you.

Posted in Market Updates
Dec. 4, 2019

Market Update - It’s beginning to look a lot like Christmas

Christmas holiday seems to be upon us sooner and sooner each year.  With retailers taking advantage of their busiest shopping season,  we are starting to see Christmas collection as early as post Halloween.  Same thing with holiday music.  Radio stations don't use to play Christmas music until after the holiday.  It almost feels like Thanksgiving has been skipped sometimes.

These all serve as a reminder that we are only days away from the end of 2019 - the end of the decade!  

From Thanksgiving to the end of the year marks the slowest time for housing when both inventory and demand drop to annually low.  There are fewer homes for sale as unsuccessful home sellers threw in the towel and pull their homes off the market.   At the same time,  with all the holiday distractions,  buyer activities drop as well.  

In the past 2 weeks alone,  the active inventory dropped by 9% - the largest drop of the year.  The inventory has not been this low since May 2018 and is 33% less than the same time last year.  Many homeowners wait to put their home back on the market until after March by playing the waiting game.  They want to take advantage of the "best time of the year to sell a home". - the spring market.  It is expecting the inventory continue to drop through the end of the year.

Demand also dropped about 7% in the last two weeks.  Expect demand to continue to drop through the end of December as more and more buyers enjoy the holiday season.  However, the decline in demand is far less than decline in Inventory - 13% less than the same period last year.  

The imbalance in the decline has also continue to shift the real estate market into a slight sellers market despite reducing in number of transactions.  Sellers are gaining more leverage during the negotiations while prices remain somewhat stable.  

With Spring being the most active time of the year to sell when demand (new escrows) climbs to an annual peak,  the increase in demand is also met with a flood of new Homes For Sale signs  -  increased competition.  

If you are a seller, considering jumping ahead of the competition,  entertain the idea of getting your home on the market now through February before a swarm of competition comes on the market.

If you are a buyer,  take advantage of the still historic low interest rate.  While I do not expect the interest rate to spike before the election, I don't have a crystal ball!  

Call me if you have any questions,  I am here to help as always!

Posted in Market Updates
Nov. 28, 2019

Winter Festivals

Best Winter and Christmas Festival in Los Angeles and Orange County

End of the year is the holiday season!  Families gather and celebrate Thanksgiving and Christmas holiday.  Homeowners dress up their houses with holiday decorations and lights.  It's definitely a happy time of the year.  Here are a few Winter Festivals and things to do during the holiday season if you are living or visiting Los Angeles and Orange County.  

This is a list that repeats each year with new additions added and updates.

Winter Fest OC 

December 19, 2019 - January 5, 2020

OC Fair & Event Center
88 Fair Dr. 
Costa Mesa, CA 

Family Fun and Date Night Charm!

Featuring

  • Ice tubing down a 9 lane, 150 foot mountain
  • Massive snow play and slide area with snow blown in daily
  • Largest outdoor ice skating rink under the stars in Socal
  • Nightly Christmas Tree lighting
  • Celebration with a parade of Winter Fest OC characters, fireworks, and snow flurry
  • Experiencing with Santa and his reindeer flying over the fairground through Christmas Eve
  • All new Alpine Village with new light maze and wintery attraction
  • Over 20 carnival rides and attractions, entertainment, seasonal eateries
  • Visit with Santa

Get up to 55% off on tickets through Groupon

Winter OC Fest Map

Get up to 55% off on tickets through Groupon

 

Chinese Lantern Festival

December 21, 2019 - January 5, 2020

Pomona Fairplex, Gate 17
1101 McKinley Ave
Pomona, CA 

Wonderful family fun activities during the holiday seasons

what to expect:

  • Awe inspiring lantern displays
  • Mythical Creature ride for Children
  • Savory food and drinks
  • Live folk musical and dance show
  • Holiday display and photo with Santa
  • Folk art craft booth

Get up to 45% off on tickets through Groupon

 

Winter Snow Fest

December 7, 2019 

Pantera Park
738 Pantera Dr.
Diamond Bar, CA 91765

100 tons of Snow!

Heaps of snow - 100 tons to be exact - make for a fun and memorable time! This festive, winter-themed event will feature four snow-packed sledding hills, snow play areas, games and activities for children, giveaways, food and a special appearance by "Flurry," the sledding penguin!

Get your tickets here

 

Pershing Square's Winter Holiday Festival

December 7, 2019 

Pershing Square
532 S.  Olive St.
Los Angeles, CA

 

Enjoy Free Winter Festival activities!

With:

  • Tons of free snow for Sledding
  • Photo with Santa
  • Magician Juggler & balloon artist
  • Video Game Lounge
  • Ice Skating Rinks
  • Food & crafts booth

Download flyer here