The average sales price for single-family homes in Santa Monica reaches a new record high in August at $3,386,000, up ▲16% from a year earlier. If we look back five years, the average sale price is up ▲44.76%, when the average sale price was $2,339,070.
The average price per square foot paid for single-family homes this year has also reached a new high at $1,219 and is up ▲42% versus 2013 when the average price per square foot was $860.
In August 2018, the average sales price in 90402 was $3,996,913, up ▲6.8% versus August 2017, 90403 registered $1,613,288, an increase of 6.7% and 90405 came in at $1,686,900, up ▲7.9%.
The highest recorded sale in Santa Monica thus far this year is a charming home with modern upgrades that pay homage to its original Craftsman character. Situated on a 20,236 square foot lot with lush park like grounds, this 5 bed, 5 bath, 5,501 square foot home features Mahogany and Douglas fir paneling and flooring, a vintage stone fireplace in living room, gourmet kitchen and commanding canyon, mountain and ocean views.
Original List Price: $11,999,000
Closed Sale Price: $11,100,000
Listing Agent: Kate Bransfield, Coldwell Banker Residential
*MRMLS single family residence average sales in Santa Monica Information is deemed accurate but not guaranteed.
According to Black Knight Financial Services Home Price Index (HPI), home price gains set another new record in June 2017, rising 0.9% from Many and 6.2% year-over-year. Moving into July, CoreLogic recently reported that home prices measured by HPI were up 6.7% on an annual basis and increased 0.9% from June. CoreLogic said its analysis of the largest 100 metro areas in the country found the housing stock in 34% of them to be overvalued while 28% undervalued. Of the top 50 markets, 46 percent were deemed overvalued, 16% were undervalued, and 8% were at value. Looking ahead, the CoreLogic HPI forecast indicates that home prices will increase by 5% on a year-over-year basis from July 2017 to July 2018.
“In July, home price growth in the Pacific northwest and mountain states led the nation with the highest appreciation rates,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year.”
In other housing news, the National Association of Realtors (NAR) just released Pending Home Sales Index (PHSI) dropped 0.8% in July, which was 1.3% lower than the PHSI a year earlier and has now fallen year-over-year in three of the last four months (the West was the only region to show a slight gain).
Lawrence Yun, NAR chief economist, continues to blame the weak market on the lack of homes for sale and called the inventory woes throughout the country “staggering.” “With the exception of a minimal gain in the West, pending sales were weaker in most areas in July as house hunters saw limited options for sale and highly competitive market conditions. The housing market remains stuck in a holding pattern with little signs of breaking through. The pace of new listings is not catching up with what’s being sold at an astonishing fast pace.”
According to Yun, the national median home sales price has risen 38% in the past five years, while hourly earnings have increased by less than a third of that, at 12%. The unsustainable trend is putting considerable pressure on affordability in some markets, especially first time buyers, and is pricing out some buyers who would otherwise be looking to buy a home. “The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves. This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell,” stated Yun.
Finally, how much money do you need to make to afford a median priced home in the US? According to mortgage search company HSH, you’ll need a salary of $56,000 per the 2nd quarter data, which is up 10% from the previous quarter. (Based on 20% down, 30 year fixed mortgage, 4% interest with base cost including principle, interest, property tax, and homeowners insurance.)
Check out how much you would have to earn to purchase a median priced home in these markets:
Seattle, WA – $93,853
San Francisco, CA – $181,341
San Jose, CA – $221,363
Dallas, TX – $61,039
Boston, MA – $98,518
New York City, NY – $99,136
Washington, DC – $88,664
Home prices increased 1.7% from the first quarter to the second quarter of 2017 according to the House Price Index (HPI) reported by the Federal Housing Finance Agency, and increased 6.6% from the second quarter last year. The FHFA monthly HPI is calculated using home sale price data from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac, therefore exclude high-end home sales purchased with jumbo loans and / or cash sales.
“U.S. house prices rose in nearly every state during the second quarter,” stated FHFA Senior Economist William Doerner. “New home sales are climbing, but relative to the overall population, they still remain low from a historical perspective. The tight inventory is a major explanation for why house prices have been increasing every quarter over the last six years.”
In other housing news, the national median existing single-family home price rose 6.2% to $255,600 in the second quarter from the second quarter of 2016 ($240,700), and surpasses the third quarter of last year ($241,300) as the new peak quarterly median sales price. In the West, existing home sales decreased 3.7% in the second quarter, but are 3.1% above a year ago. The median existing single-family home price in the West increased 7.5% to $372,400 in the second quarter versus the second quarter of 2016.
Lawrence Yun, NAR chief economist, said “The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season. Listings typically flew off the market in under a month – and even quicker in the affordable price range – in several parts of the country. With new supply not even coming close to keeping pace, price appreciation remained swift in most markets.” Yun added, “The glaring need for more new home construction is creating an affordability crisis that needs to be addressed by policy officials and local governments. An increasing share of would-be buyers are being priced out of the market and are unable to experience the wealth building benefits of homeownership.”
Here’s a quick look at the number of closed sales in the Beach Cities / South Bay thus far in 2017:
CLOSED SALES | Year-over-Year | Single-Family Residence
2017 2016 Variance
El Segundo 46 62 (-16)
Manhattan Beach 233 199 +34
Hermosa Beach 61 79 (-18)
N. Redondo Beach 124 120 +4
S. Redondo Beach 61 86 (-25)
Hollywood Riviera 77 59 +18
Home prices continue to rise in the second quarter of 2017 against a diminished housing inventory that is hitting all-time lows. According to the National Association of Home Builders and First American Title Insurance Leading Markets Index (LMI), nearly 300 markets across the U.S. posted an increase in economic and housing activity from the first to the second quarter. The LMI measures current home prices, as well as permit and employment data to plot the economic health of an individual market.
The index shows the market is currently running at an average of 102% of normal housing and economic activity in the second quarter, despite employment activity of 98% of normal and single-family permits at just 54% of normal activity, which is far below historical levels.
“This report shows that the housing and economic recovery is widespread across the nation, and that housing has made significant gains since the Great Recession,” NAHB Chairman Granger MacDonald said. “However, the lagging single-family permit indicator shows that housing still has a ways to go to get back to full strength.”
In other housing related news, CoreLogic’s recently released Loan Performance Insights Report shows that, nationally, 4.5% of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in May 2017 – the lowest amount in nearly a decade.
“Strong employment growth and home price increases have contributed to improved mortgage performance,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Early-stage delinquencies are hovering around 17-year lows, and the current-to-30 days past due transition rate remained low at 0.8%. However, the same positive economic conditions helping performance have also contributed to a lack of affordable supply, creating challenges for homebuyers.”
Finally, according to Fannie Mae’s National Housing Survey for the month of July, consumer attitudes toward buying and selling a home turned negative in July. The net share of those who said it was a good time to buy a home fell 7 points (to 23%,) which was 10 points lower than a year earlier. The net share of those who said it was a good time to sell plummeted 11 points. Among consumers who now believe it is a bad time to sell, a rising share cited economic conditions with nearly 50% of those citing rising home prices as their primary concern.
“It’s clear that high home prices are a growing challenge helping send buying sentiment to a record low,” stated Doug Duncan, senior vice president and chief economist at Fannie Mae. “However, we find the notable decline in selling sentiment surprising. If it persists, this month’s decrease in optimism regarding the direction of the economy, which appears to coincide with rising uncertainty regarding the outlook for pro-growth legislation this year, could weigh on overall housing sentiment in the second half of the year.”
Home prices are on fire – and look to continue to stay hot through balance of 2017
According to its recently released Home Price Index (HPI,) CoreLogic reported that home prices are up both year over year and month over month. Nationwide, home prices increased year over year by 6.9% in April 2017 compared to April 2016 and increase month over month by 1.6% in April 2017 compared with March 2017. The CoreLogic HPI Forecast indicates that home prices will increase by 5.1% on a year over year basis from April 2017 to April 2018.
CoreLogic also reported that U.S. homeowners with mortgages (which is roughly 63% of all homeowners) have seen their equity increase by a total of $766.4 billion dollars since the 1st quarter of 2016 – an increase of 11.2%. Today, nearly 9 million borrowers have regained equity since the height of the housing crisis in 2011.
On the other hand, the total number of residential mortgages with negative equity decreased 3% from the 4th quarter of 2016 – to 3.1 million homes or 6.1% of all mortgaged properties. CoreLogic Chief Economist stated, “One million borrowers achieved positive equity over the last year, which means mortgage risk continues to steadily decline as a result of increasing home prices.”
And there’s more news on mortgages out today – Freddie Mac just released it Primary Mortgage Market Survey, showing the 30-year fixed mortgage dropping for the 4th consecutive week and hitting its lowest level in nearly seven months. 30-year fixed mortgages averaged 3.89% with an average .5-point for the week ending June 8, 2017, down from last week when it averaged 3.94%. For reference, a year ago at this time the 30-year fixed rate mortgage averaged 3.6%.
With the market so hot, one has to wonder what’s happening with home flipping – the practice of buying and then reselling the same property within a 12-month period. Well, ATTOM Data Solutions just released its Q1 2017 US Home Flipping Report, which showed that home flipping fell to the lowest level in two years during the 1st quarter of 2017. Interesting, at the same time, the share of those flips using mortgage financing rose to a 9-year high. The company reported that there were 43,615 single family homes and condos flipped during the 3-month period, down 8% from the previous quarter and 6% from a year ago. Flipping accounted for 6.7% of all single-family home and condo sales during the quarter, an increase from 5.8% in the fourth quarter, but unchanged from a year earlier.
So what’s up with the millennials?
The National Association of Realtors (NAR) just released it 2017 Home Buyer and Seller Generational Trends study, which found that millennials were the largest group of home buyers (34%) for the fourth consecutive year. By comparison, baby boomers were 30% of buyers.
“Millennials have been fairly slow to get into the market, but we are seeing an uptick in millennial buyers this year – which is a good sign, because as home values rise, we want a wider number of people to participate in this housing recovery,” said Lawrence Yun, chief economist at NAR. “There’s a pent-up demand and as the economy continues to improve, we expect to see more people in their early thirties, adults who are still living with their parents – clearly not their idea of the American dream – to begin to look for their own housing units.”
In other housing news, economists at Freddie Mac see the U.S. housing market “on track to eclipse last year as the best in over a decade.” The company’s May Outlook gives credits to the housing market’s strong start to 2017 in part to the surprising downward movement of interest rates since March. After rising to 4.3% in March, mortgage rates have dipped back down near the 4.0% range and have been holding pretty steady. The general sentiment is that the Fed will increase rates a few times before the end of 2017. All told, Freddie Mac thinks 2017 is shaping up to be the best year for housing in over a decade.
Finally, Fannie Mae has declared it’s a sellers market.
Based on Fannie Mae’s monthly National Housing Survey, the net share of Americans who said that now is a good time buy a home reached a record low of 27%, (a decrease of 8%,) while the net share who stated that it is a good time to sell a home reached a record high of 32%, a gain of 6% in May 2017.
Fannie Mae said it was only the 2nd time in the survey’s history that the net share of those saying it’s a good time sell surpassed the net share of those saying it’s a good time to buy. In fact, the “sell” component is 19 point higher that the same time in 2016. All of this makes perfect sense since the market has been on fire and continues to stay hot.
Written by Alisha Henson | Photography Courtesy of Killefer Flammang Architects
Designed with an edge and fit for the urban enthusiast, a new seven-story, 209-unit apartment building offers spacious and contemporary residences stylishly conceptualized with a European flair. With high-end cabinetry, quartz countertops, luxury vinyl flooring and designer quality fixtures, 3640 Wilshire affords residents a sophisticated take on modern living. Located on the corner of Wilshire and South Harvard Boulevard, the 218,000-square-foot development offers a combination of au courant apartments and 3,100 square feet of commercial space on the ground floor. Features include a lavish Zen garden, state-of-the-art fitness center and rooftop terrace. Scheduled for completion fall 2017. For more information,
contact Jamison Properties: email@example.com.
Written by Wendy Bowman
This contemporary Beverly Hills abode owned by composer Don Caverhill has quite the list of credits, having served as the scene of numerous TV commercials—for Samsung, Intel, Microsoft, Range Rover, Mercedes and Sony Music—as well as the setting of The Weeknd’s “Star Boy” video. “This home is a timeless piece of art spanning generations—appreciated by champions of industry from Microsoft to Mercedes Benz, to young pop culture icons like The Weeknd,” says Aaron Kirman, who is listing the three-level property with Verna Helbling and Tim Perry (all of John Aaroe Group) for $6.3 million. Found at 2500 Briarcrest—on a ridge overlooking the Beverly Hills Canyons—highlights of the Zoltan Pali-designed property include complete automation; living areas that seem to float above stunning views of the city and beyond; an upper-level master wing sporting dual baths and closets; and an entertainer’s backyard with a patio, fire pit and infinity spa. Perhaps the most outstanding feature is the exterior’s wall of fins that control light and shade to create a striking, ever-changing work of art.
Written by Wendy Bowman
Hollywood director and producer Joe Carnahan’s Pacific Palisades home is now on the market for $3.895 million. Situated on Temecula Street, in the highly sought-after El Medio Bluffs neighborhood, the residence was built in 1947 and has since been remodeled to include 3,654 square feet of elegant living space highlighted by soaring ceilings in the kitchen and living room and French doors that open to a massive, grassy backyard. In addition, the upstairs features an office and a spacious master suite with a luxurious spa-like bath, walk-in closet and mountain views. Adding to the property’s special appeal is a private, gated courtyard with a stone fireplace. “The outdoor living area provides an intimate area for entertaining,” says Ryan Jancula, who is listing the home with Amy Alcini and Trevor Montano, all of the brokerage, Compass. “This home is ideal for the modern family, only a few minutes from ocean-bluff views and the shops and restaurants of Palisades Village.”
In December 2016, Southern California home prices reached their highest levels in more than nine years. According to CoreLogic, an improving economy and home shortages raised home prices nearly 6.8% over the past year. Corelogic confirms December’s median home price of $470,000, up 1.1% from previous months.
With increased demand the rise in December’s six-county regional median price hit $465,000, which at the time was at a nine-year high.
With mortgage rates and prices rising steady over household incomes since the November Presidential election, the Southern California region became one of the hottest areas for the housing market.
Economists project prices will continue to rise in 2017, but not as continuously as they have in recent years, making those looking to purchase a home more assertive in their search before prices reach even higher plateaus.
While the outcome of rising mortgage rates is uncertain, home prices continue to become more expensive. This uncertainty would produce additional demand if consumers rush to lock in rates before they climb higher. The rush to purchase before rates increase is not occurring in mass.
CoreLogic reported sales dropped 2.9% last month compared with December 2015. CoreLogic analyst Andrew LePage said, “a large part of that decline was because new federal lending regulations took full effect in fall 2015 and pushed many deals that would have closed in November of that year into the following month.”
“The number of deals recorded in December 2015 was artificially high,” he said in a statement. That factor, along with an additional business day last year, “outweighed whatever boost December 2016 sales got from the presidential election.” In 2016, sales across the region were up 2.1% from 2015 – with the strongest gains seen in counties of Riverside and San Bernardino. Nationwide, the National Association of Realtors said Tuesday, “sales of previously owned homes dropped 2.8% in December compared with November after adjusting for seasonal fluctuations.”
California home sales tempered in 2014, falling roughly 8.2 percent behind the previous year. But with positive housing indicators and a strengthening economy, experts are predicting a 2015 marked by increased home sales and a better balance between sellers and traditional home buyers.
According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) “2015 California Housing Market Forecast,” economists expect a 5.8% increase in existing home sales in 2015, which translates into 402,5000 total units. They further expect median prices to continue upward, with a forecasted 5.2% increase bringing the median home price up to $478,700.
Last year’s sluggish home sales resulted in large part from dramatic increases in home price coupled with depleted market inventory — an environment that caused many investors to exit. Without traditional consumers stepping in to take their place, 20 months of double-digit year-over-year home price growth finally normalized to single digits in 2014.
“Stringent underwriting guidelines and double-digit home price increases over the past two years have significantly impacted housing affordability in California, forcing some buyers to delay their home purchase,” said C.A.R. President Kevin Brown in a press release. “However, [in 2015], home price gains will slow, allowing would-be buyers who have been saving for a down payment to be in a better financial position to make a home purchase.”
C.A.R. expects 30-year mortgage interest rates, which repeatedly defied forecasts last year, to remain at historically low levels despite a slight increase to a year average of 4.5 percent. This bodes well for potential buyers, who Brown wants to remind that 20 percent down is not always required to buy a home.
“There are numerous programs available that allow consumers to buy a home with less down payment, including FHA loans, which lets buyers put down as little as 3.5 percent,” he said.
Looking to economic recovery, last year was the strongest since the recession hit in 2008 and closed out with a 5.6 percent unemployment rate nationwide. Currently hovering around a 7.9% unemployment rate, Los Angeles is is forecast to return to pre-recession employment numbers in the coming year.
Yet even with job growth, low interest rates, and slowing gains in home prices, affordability remains a key issue, particularly in the state’s luxury markets. According to C.A.R.’s Traditional Housing Affordability Index, just 27 percent of households will be able to purchase a median priced home in California based on traditional assumptions. This forecast is 3 percent lower than 2014 projections, and is down significantly from 56 percent in the first quarter of 2012. Much of this is attributable to the fact that household income declined while home prices swelled.
With affordability where it is, the homeownership rate for 18- to 34-year-olds continues to fall as the number of Millennials renting or living with parents continues to rise. Household formation for this same demographic is remarkably slow, contributing to Census data that shows an addition of just 476,000 new households in the 12-month period ending in March 2014. By contrast, the two periods prior had an average of 1.3 million added households. Even in today’s “renter nation,” the C.A.R. 2014 Millennial survey shows that over half of this group places homeownership as an eight or above on a scale of one to ten, where ten is “extremely important.” Roughly the same percentage expects to purchase a home within five years.
“With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015,” concluded C.A.R. Vice President and Chief Economist Leslie Appleton-Young.