Factors In Determining Your Maximum Loan Amount

You might think lenders would need to do a bunch of fancy calculations to determine how much money you can borrow. There are certainly several factors that go into the final calculation, but if you want a rough estimate, it’s actually relatively simple. Lenders tend to use one of two formulas, either mortgage payment as a percentage of gross monthly income, or debt to income ratio.

Both of these factors involve your gross monthly income — that is, the amount you were paid before deductions from social security and taxes and before making any payments or contributing to savings. Where they differ is what your gross monthly income is compared against. The first method calculates what your monthly mortgage payment would be based on actual interest rate and ensures that it doesn’t exceed 28% of your gross monthly income. The debt to income ratio method compares your gross monthly income against your debts, such as credit card debt and other loans. These existing debts plus your new loan payments should not exceed 36% of your gross monthly income. Both these methods do require knowing the interest rate, which is determined by several factors, but if you know about where interest rates are, you can make an educated guess.

Photo by Jeswin Thomas on Unsplash

2023 South Bay Real Estate: Fail

By every measure South Bay real estate failed last year. The volume was down from the prior year in every residential area, the median price fell from 2022 heights everywhere, and the double whammy of crashing sales and falling prices brought the total revenue down from 2022. Judging from early reports the same is true across most of the state.

Part of the story doesn’t read so poorly though. As we look back across the year, the second of half of 2023 was far better than the first half of the year. This in two respects: first, the month-over-month statistics for sales volume have improved. The median price is still falling, but that’s to be expected if we’re going to see a sales volume increase concurrent with continued high interest rates. The market is going to demand that some of the “overly enthusiastic” price increases come back down.

Second, the year-over-year decline in median price is slowing—not reversing—slowing. Roughly speaking, the number of homes sold for less than 2022 prices improved from 83% in the first half of the year to 45% in the second half of 2023. That signifies an approaching balance in the market. Buyers are still holding back, but some sellers are coming forth to meet them.

2024 South Bay Real Estate: Better Days Ahead

We expect to see continued slippage in the median price, accompanied by increased sales volume. The Los Angeles South Bay is somewhat insulated from the vagaries of national and international events, but 2024 is facing an active political climate. The continuing wars around the planet would be enough to rattle economic markets here. This year sellers and buyers also have to factor in a contentious national election.

While the Federal Reserve System is officially apolitical, history has shown a tendency for improved economic conditions during election years. The final quarter of 2023 saw a softening of the wild swings in home sales volume and pricing. With less than 10 months until the presidential elections we anticipate continued easing of interest rates and increased sales activity. Median prices have fallen by about 2% across the South Bay in 2023 and probably won’t drop a lot more in 2024.

Sales volume fell by 15% across the South Bay in 2023. Nearly all of that drop was in the first half of the year. The new year is expected to be positive with growth in sales across the board.

Beach: Strong Sales On Weak Prices

Comparing December to November, the number of homes sold at the Beach was up 13%. That increase in sales is on top of a 9% increase in November, a dramatic turnaround from the 27% drop in October. On the other hand, the month to month median price fell 5% in December.

December of 2023 was similarly mixed when compared to December of 2022. Year over year saw sales volume increase a staggering 39%. Looking back shows December of last year as the absolute slowest month of the year for home sales at the Beach. The median price plummeting by 10% certainly helped generate those December 2023 sales.

Year to date numbers, comparing all 12 months, showed the number of home sales off by 11%. At the same time the median price was down 4% for the year. Much of the annual decline in sales volume occurred in the first half of 2023, when monthly drops of 25%-35% put the brakes on prices. Beach area median prices have taken steep falls since February 2023. It may take a couple more months before the first stimulating news on the interest rate front, but it would appear we’re looking at the “bottom of the market” now. Regardless of whether you’re a buyer or a seller, this is time to reassess your options.

Harbor: Positive Across the Board

December versus November of 2023 saw sales volume go up 1%. During that time the median price went up 2%. Harbor area homes sales dropped precipitously through the third quarter when they suddenly found strength and were positve in the single digits for the last quarter. Monthly declines in median price have been the order until the final quarter when median prices appear to have leveled out.

Looking from the annual perspective, home sales in December 2023 were up 3% over the last month of 2022. Using the same comparison, median prices were up 13%. This suggests the Harbor area may already be seeing improved stability.

Summarizing 2022 versus 2023 for the Harbor area, overall home sales volume dropped 17% for the year. Looking from a longer term perspective, sales have fallen 26% from the ‘pre-Covid benchmark year’ of 2019. From 2022 to 2023 the median price fell 2%. Again over the longer term, median prices in the Harbor area are up 31% over 2019.

Hill: Median Price Down – Sales Up

December home sales increased on the Hill by 9% over November levels. For the same mnthly period, median prices were down 9%. This pattern is expected to shift over the first quarter of 2024 as prices stabilize and interest rates decline to allow more potential purchasers to enter the market.

Compared to December of 2022, December 2023 came in with sales of 22% more homes and a median price increase of 5%. A solid year over year growth for the Hill.

Taking a step back and looking at the full year, sales volume fell 17% from 2022. At the same time, median price fell only 1%.

Inland: Sales and Prices Still Sliding

The last month of the year brought no relief for the Inland area. The number of homes sold continued to decline with sales down 2% compared to November. The median price was down for the second month, this time 5% for the month.

Looking at the same month last year, gives year over year sales volume down 2%,and a median price that’s down 2%. The final quarter of the year has been a rough adjustment period for the Inland area.

In the broader year over year view, the Inland area again fell, with sales volume down 11%. Median price was flat for the period with a tendency toward negative. It’s a transitional period which should resolve into a firmer picture by the spring of the year.

Beach=Manhattan Beach, Hermosa Beach, Redondo Beach, El Segundo
Harbor=Carson, Long Beach, San Pedro, Wilmington, Harbor City
PV Hill=Palos Verdes Estates, Rancho Palos Verdes, Rolling Hills, Rolling Hills Estates
Inland=Torrance, Lomita, Gardena

Photo by frank mckenna on Unsplash

Coming Up at the Grand Annex

un-told. (mostly) true stories

A weekend of storytelling where both seasoned performers and brave novices get up on stage to share their (mostly) true stories in front a live audience. The mission of un-told is to connect people through community, laughter, and inspiration. We want to give storytellers a platform to share their stories in front of a supportive and amazing audience.

Performance Schedule:

  • Opening Night Friday, 1/19 at 7:30 PM
  • Matinee Saturday, 1/20 at 2 PM
  • Closing Night Saturday 1/20 at 7:30 PM

John Jorgenson Quintet

Sat, Jan 27, 2024
8:00 PM
Doors 7:00 PM

John Jorgenson is a multi-instrumentalist and master guitarist who is recognized across rock, jazz and Americana genres. As the leader of the John Jorgenson Quintet (JJQ) his musicality and virtuosity absolutely shine. The group’s style is inspired by the dynamic string-driven swing created by Django Reinhardt in Paris in the 1930s, yet Jorgenson’s compositions draw additionally from Latin, Romanian, Greek, classical, and rock music.

JJQ is the only American act to ever headline the prestigious Festival Django Reinhardt in France and has been featured at Django-celebrating festivals around the world.

In addition to his jazz laurels, Jorgenson toured for six years with Elton John, won a country music Grammy, and has collaborated with pretty much everyone from Barbra Streisand to Bonnie Raitt, from Brad Paisley to Luciano Pavarotti.

No Depression music magazine says, “John Jorgenson has a rare kind of genius in that he’s equally comfortable and capable of playing Buck Owens, Beatles riffs, or jazz leads…”

Renee Safier & Bob Malone

Fri, Feb 02, 2024
8:00 PM
Doors 7:00 PM

Grand Annex favorites Bob Malone and Renee Safier join forces for a night of classic jazz and blues standards. Renee is an award-winning versatile rock, blues, and jazz vocalist. Known best for her work with Andy Hill and their band Hard Rain, Safier has played her guitar and sung her heart out to devoted folk-rock fans for decades.

Bob Malone is known for his high-energy piano-playing hybrid of rock, pop, and blues. He’s has toured with John Fogerty since 2011, done session work with Ringo Starr and Avril Lavigne and has amassed his own a loyal fan-base through 25 years of touring and nine critically acclaimed albums. The New Yorker called Bob, a “keyboard wizard” and in 2018, his recording of “You’re A Mean One, Mr. Grinch” was featured in the trailer for the Illumination/Universal film, The Grinch.

Andy Hill & Renee Safier

Tuesday, January 16 from 5:30PM to 7:30PM — SoCal favorites, Andy & Renee, along with their band Hard Rain, have taken their unique sound and multi-instrumental skills to venues large and small all over the world. Named, “Best of The Beach” for many consecutive years by The Easy Reader, their seventeen CD and three DVD releases have also won them countless awards. They are known for their numerous energy-packed live performances and have made a name for themselves as producers and performers of Dylanfest, an 8-hour music festival attended by hundreds of fans and featuring many of L.A.’s top musicians annually in the Spring.

Check out this fabulous duo at the world famous Lighthouse Cafe in Hermosa Beach Tuesday, January 16 from 5:30PM to 7:30PM, or any other Tuesday! They play the Lighthouse nearly every Tuesday.

Andy & Renee at the Banana Leaf

THU, JAN 18 @ 6:30PM — 9:00PM Come try this venue out! Great listening room and both Indian and American food menu!

Banana Leaf & Beach Cities Social, 1408 S Pacific Coast Hwy, Redondo Beach, CA 90277

Andy & Renee and Hard Rain at The Lighthouse

SUN, JAN 21, 2024 @ 2:00PM — 5:00PM The Lighthouse Cafe, Don’t miss this spectacular show!! Andy & Renee plus the full Hard Rain band at one of the best known venues in the South Bay.

The Lighthouse Cafe, 30 Pier Avenue Hermosa Beach, CA 90254 310 376-9833, Hermosa Beach, CA 90254

Pro Songwriter Showcase – January 2024


JODI SIEGEL – Every month on the third Tuesday Jopdi brngs together a few professional songwriter friends to play some of their own music for a very attentive and appreciative audience at the Project Barley Brewery in Lomita, CA. Today is that day! Jodi will kick off the session sith a few of her own pieces followed by these fine folk.

HAROLD PAYNE IS A MULTI-PLATINUM SONGWRITER – He has written songs for such diverse artists as Rod Stewart, Patti LaBelle, the Temptations, and long time collaborator, Bobby Womack—literally from Peter Paul and Mary to Snoop Dogg. Most recently, Rudimental reached #1 on the UK album charts containing the Womack/Payne song “New Day”, “Daylight” charted with Kelly Rowland plus the CD “Bravest Man in the Universe” which was co-written by Payne, Bobby Womack, Damon Albarn (Gorillaz) & Richard Russell (XL Recordings) received the prestigious “Q” award in the UK for “Best Album of the Year.”

CHUCK ALVAREZ – Many know Chuck as a guitar player for jazz great Flute player Tim Weisberg and the soul band THE Emotions , but Chuck is a well know producer of many singer-songwriters and a wonderful writer too! He has been rocking audiences for 40 plus years and shared the stage with legends like Johnny Winter, Robben Ford, Deana Bogart, Little Richard, David Benoit and many more. If you live here in the South Bay you know and love Chuck!!

PAULA FONG – American/folk artist Paula Fong Paula Fong is an Americana/Folk singer songwriter based in Los Angeles whose voice and style of writing has been compared to the early songs of Joni Mitchell, but has also been heavily influenced by the raw soulful poetry of Patti Griffin and the honest candor of Gillian Welch. In the past, she’s sung with song/screen writer Tracy Newman and was part of a duo with Tom Kell (Skyboys, J.D. Souther) that released two co-written albums together; “Between Heartache and Promise” and “The Other Side of Sorrow”. Currently, she is preparing to release her first solo album in the Spring of 2024 and also sings and plays in Americana/Indie Folk band, Abby Posner and the Big Fall.!

NO RESERVATIONS. Get there early to get a table! Put it on your calendar and see ya there!!

Project Barley serves excellent Food (Gourmet Pizza, gluten free/vegan options, wings, sandwiches, salads), wine, and award winning beer. Food served till 8:30pm. 2308 E Pacific Coast Hwy, Lomita, CA 90717 https://projectbarley.com/

Tips For A Stress-Free Housewarming Party

With all the stresses of of buying a new home and moving in, hosting a party may be the last thing on your mind, even if you really want to celebrate your move. You may instead want to simply book a reservation at a restaurant, especially if you don’t feel like cooking. But parties should be a way to de-stress, not a stressful experience, and the same goes for housewarming parties. Besides, you’ll want to send the invitations far enough in advance that you’ll probably have had some time to accommodate to your new home by the time the date comes around.

Remember not to make things harder on yourself or your guests. Instead of planning a full sit-down meal, provide snacks and beverages that people can pick and choose from at their own leisure. Decor can be relatively simple. You don’t need to have already finished unpacking your Christmas decorations — even if you did buy in December.

Even though there’s no need to be overly nervous, you should still put some thought into it. Pay attention to how you set up the space for your celebration. The areas where you want people to mingle or pick up snacks and drinks should be easily accessible. You can also make less work for yourself later by checking out local grocery stores when deciding what you want to serve. That way you get to know the area better, and your new neighbors might also appreciate something familiar to them.

Photo by Jenna Stensland on Unsplash

Real Estate Investment On A Budget

Many people believe they don’t have the capital to initiate a real estate investment. While it does require some capital, the requirement may be lower than you think. This is especially true if you can find a group of people that want to pool money with you for an investment. You don’t need to demonstrate that you could afford it on your own in order to convince investors to pool money. But even if you aren’t crowdfunding the investment, with enough good research you can find something that works on your budget.

The first thing you need to do is figure out what that budget actually is. While there is always some risk in investing money, real estate is not supposed to be a high-risk investment — don’t try to push the boundaries of your financial stability. Research the market and connect with real estate professionals, or more experienced investors, even if you don’t plan to pool with them. You should also research loan options, and don’t be afraid to take a loan out on investment property, since the rent should ideally pay for the loan over the course of its lifetime. You can also save on costs with some DIY work.

There are a couple different ways to start off. One option if to find cheaper, smaller investments — including off-market properties, which are often at discounted prices — and work your way up after you’ve build up some equity. Another is to purchase a multifamily residence and live in one of the units, termed “house hacking.” This allows you to simultaneously only have one property’s payments to deal with, earn rental income, and accrue equity, with the tradeoff that multifamily properties have a higher upfront cost.

Photo by Acton Crawford on Unsplash