Predictions for the 2020 recession’s impact on inventory

The real estate journal First Tuesday asked readers in July how they felt the 2020 recession would impact for-sale inventory. The votes are now in.

A plurality of respondents, 45%, felt inventory would go down. This would likely be a result of both anxiety from sellers and not enough construction. However, the number who instead felt construction would increase and there would be rental vacancies, leading to more listings, was 39%, not too far off from the plurality. The third and final category, those who felt there would be little to no impact, totalled 16%.

But that was July. It’s now August, and there certainly has been an impact. It turns out the 45% were right. Inventory has declined steeply, and construction companies are even more wary about building than they already were before the pandemic. Fortunately, declining rental vacancies points to an increase in inventory as soon as construction starts back up. Changes to California zoning laws also hope to speed up construction.

Photo by Macau Photo Agency on Unsplash

More: https://journal.firsttuesday.us/the-votes-are-in-how-the-2020-recession-impacts-californias-for-sale-inventory/72705/

How to protect yourself from extreme heat

California is seeing a rise in heat waves. It’s important to know how to keep safe in extreme weather conditions. Here are some suggested precautions from Senator Steven Bradford.

  1. Avoid the sun– stay indoors from 10 a.m. to 3 p.m. when the burning rays are strongest.
  2. Drink plenty of fluids– 2 to 4 glasses of water every hour during times of extreme heat.
  3. Replace salt and minerals– sweating removes salt and minerals from your body, so replenish these nutrients with low sugar fruit juices or sports drinks during exercise or when working outside.
  4. Avoid alcohol.
  5. Pace yourself– reduce physical activity and avoid exercising outdoors during peak heat hours.
  6. Wear appropriate clothing– wear a wide-brimmed hat and light-colored lightweight, loose-fitting clothes when you are outdoors.
  7. Stay cool indoors during peak hours – set your air conditioner between 75° to 80°. If you don’t have air conditioning, take a cool shower twice a day and/or visit a County Emergency Cooling Center. Find a local emergency cooling center at lacounty.gov/heat.
  8. Monitor those at high risk– check on elderly neighbors, family members and friends who do not have air conditioning. Infants and children up to 4 years old, people who overexert during work (e.g. construction workers) and people 65 years and older are at the highest risk of heat-related illnesses.
  9. Use sunscreen – with a sun protection factor (SPF) of at least 15 if you need to be in the sun.
  10. Keep pets indoors– heat also affects your pets, so please keep them indoors. If they will be outside, make sure they have plenty of water and a shaded area to help them keep cool.

It is also recommended to reduce electricity usage to avoid shortages and service interruptions. If you are experiencing difficulties from extreme heat, Los Angeles County has designated Cooling Centers with air conditioning. A list of the Cooling Centers can be found in the full article.

Photo by Jonathan Borba on Unsplash

More: https://sd35.senate.ca.gov/sites/sd35.senate.ca.gov/files/e_alert/20200820_SD35_newsletter_410.htm

The obstacles to solving the housing shortage

We’re all well aware that California has been facing a shortage of affordable housing. Affordable housing is also an important step in recovering from the current recession. So, why hasn’t it happened yet? There are a couple of reasons.

It’s true that not enough homes are being built, but it’s more complicated than that. Not enough affordable housing is being built — because it’s actually more expensive to build than high-tier homes. Whenever housing is developed, it’s subject to a development fee, the rules for which are set at the city level, so they’re hard to standardize. The development fee can range from 6-18%, reaching upwards of $150,000 in some cities. The big issue is that this fee is charged per unit, which means that affordable housing developments, which invariably consist of multiple, smaller units, are subject to multiple development fees. This makes it difficult for developers to turn a profit from affordable housing projects.

The other reason is also the same reason it’s so important to our recovery — the job loss from COVID-19 and the recession itself. These factors have reduced purchasing power, increased homelessness, and increased the demand for lower-tier housing. Construction companies can’t keep with the ever-increasing demand for their most expensive, lowest return-on-investment projects.

Photo by Jeriden Villegas on Unsplash

More: https://journal.firsttuesday.us/homebuilding-is-key-to-the-next-recovery/72698/

Automation is coming to restaurants

As a result of COVID-19, restaurants are looking for ways to reduce the interaction between workers and customers. One solution? Robots. Robot chefs have been around for a while, but weren’t always successful. They’re now gaining more traction as restaurants see them as becoming a necessity.

New plans include a burger-flipping robot named Flippy at White Castle and a smoothie-making robot called Blendid, which is expected to have more widespread availability. Chowbotics reports 60% increased demand for Sally, a salad-making robot, and Wilkinson Baking Co. said they have also been getting more inquiries about their BreadBot.

Some are skeptical, though. Max Elder of Food Futures Lab warns that automation can’t solve all the problems within the food industry, and that offering it as a solution may take attention away from issues that were already in existence before the pandemic began. Elder also says the human factor is important — “Food is so personal, and it needs to involve humans,” according to him. Automated food companies insist they aren’t trying to replace human workers, only streamline the process so that workers can be more efficient, but nevertheless automation does reduce the demand for labor.

Photo by David Levêque on Unsplash

More: https://apnews.com/8782f38c9bfb0955a5f1dfd952a9e866

Tuna Salad

This is more than a tuna salad. This is a meal in a tortilla, a salad on greens to linger over with wine, hors d’oeuvre on chips, or an ultra tasty wrap in a swirl of your favorite cheese!

Albacore as everyone likes it. My general sizing recommendations are: use one if it’s on the large end of the size spectrum, use two if it’s on the small end, etc.

12 to 15 ounces (approximately) of cooked, flaked tuna
2-3 stalks of celery, in a fine dice
1-2 carrots, shredded
1-2 pickled cucumbers (dill pickles are my favorite)
red pepper flakes (optional)
1 large dollop of Dijon mustard
3-4 large dollops of mayonnaise
1 teaspoon rubbed sage
1 teaspoon dried dill
salt and pepper to taste.

Process

Let’s start by saying that I really don’t measure anything. If it looks like enough, it’s enough. If it doesn’t, add more. By the same token, if there’s something in the refrigerator that looks like it belongs, put it in! This is one of those “family” recipes where the cook adds and subtracts “to taste.”

First step is to get out a large mixing bowl, a cutting board and your favorite knife.

Flake the tuna into the bowl. I generally use canned albacore tuna, solid, white, in water. Albacore is mild and suits most taste buds. Actually, any tuna will do. Fluffed up, it should be in the neighborhood of 1.5 to 2 cups of tuna.

Wash the celery and carrots. I never bother to peel, but feel free to do so, if you like. Cut both lengthwise, into long, thin slivers. Then turn sideways and cut into a fine dice, approximately ¼ inch square, or less. Add to the bowl. There is a tool, photo here, that will do a very creditable job of creating long, skinny slivers without using a knife. Personally, I love my chef’s knife! I even use it for things it wasn’t designed to do.

Moving on, rinse the pickled cucumber. Using the same process, cut it into a small dice, and add to the bowl. If you’re pressed for time, or prefer the taste, there are commercially available pickle relishes, or spreads, that can serve the same purpose. I think Trader Joe still carries one called “sweet pickle relish” that serves nicely and saves a lot of time.

Sprinkle the sage, dill, salt and pepper over the top. At first, it’ll look like too much, but once mixed, it’ll be fine.

Now, add a dollop (I use a tablespoon, heaped to the point of dripping off) of mustard and most of the mayonnaise. Mix thoroughly. The mixture should hold together nicely, without being crumbly, or drippy. If I plan to use it on bread, I like it a bit more moist. If it’s added to lettuce, more dry. Add more mayonnaise as required to reach a suitable consistency.

For a tasty tuna sandwich, try preparing it open face, covered with a thick layer of tuna salad. Top with a generous amount of shredded or sliced cheddar, and toast until cheese is melted. If your taste buds lean to the spicy side, try a liberal sprinkle of red chile flakes before the toaster.

Be expressive with this dish! Use it as an appetizer, with a dollop of tuna on a tortilla chip and a dusting of chopped cilantro. Or top a plate of mixed greens with three good sized scoops of tuna salad and add the fruit of your choice.

Though tradition calls for an earthy white wine, I’ve often paired a spicy tuna mix with a strong red and had a wonderful repast. Enjoy your meal!

Many lockdown layoffs may be more permanent than temporary

Of course, no one who was laid off during the lockdowns was happy to lose their job. But at least initially, the expectation for most was that they would be returning to their job once the lockdown was over. In most cases, that hasn’t happened, both because COVID-19 has not yet been contained and because many of those positions simply don’t exist anymore.

The economic recession has been difficult on small businesses with tight budgets that are not getting as many customers, but still have the same costs without laying off workers and often even closing down facilities entirely. This means that the same businesses won’t have the extra income to rehire the workers they laid off. Businesses that are transitioning online rather than closing down may be hiring people again once a vaccine is widely available, but probably not the same people — they’re going to need a different skillset. People nearing retirement may be forced to retire early, as most businesses won’t want to hire someone who will only be working there a few years before retiring. All in all, a currently estimated 50% of jobs lost during COVID-19 will not be recovered, despite the estimate being 17% in April.

Photo by Markus Winkler on Unsplash

More: https://apnews.com/89992979ca3c3ba72eb2cd31a9ca0e5d

55+ Options in South Bay

This is not intended to be an exhaustive list of 55+ housing choices, but a reference point for the more commonly known, age-restricted accommodations available in the Los Angeles South Bay. We welcome your input, but cannot guarantee inclusion.

Condominiums

Breakwater Village, 2750 Artesia Blvd, Redondo Beach, CA 90278
Courtyard Villas Estates, 3970 Sepulveda Blvd, Torrance, CA 90505
Gables, 3550 Torrance Blvd, Torrance, CA 90503
Meridian, 2742 Cabrillo Ave, Torrance, CA 90501
Montecito, 2001 Artesia Blvd, Redondo Beach, CA 90278
New Horizons, 22603-23047 Maple Ave and 22601-23071 Nadine Circle, Torrance, CA 90505
Pacific Village, 3120 Pacific Blvd, Torrance, CA 90505
Parkview Court, 2367 Jefferson St, Torrance, CA 90501
Rolling Hills Villas, 901 Deep Valley Dr, Rolling Hills Estates, CA 90274
Sol y Mar, 5601 Crestridge Road, Rancho Palos Verdes, CA 90275
Sunset Gardens, 24410 Crenshaw Blvd, Torrance, CA 90505
Tradewinds, 2605 Sepulveda Blvd, Torrance, CA 90505
Village Court, 21345 Hawthorne Blvd, Torrance, CA 90503

Independent/Assisted Living/Memory Care Facilities

Belmont Village, 5701 Crestridge Road, Rancho Palos Verdes, CA 90275; 310-377-9977
Brookdale Senior Living, 5481 W Torrance Blvd, Torrance, CA 90503; 310-543-1174
Canterbury, 5801 West Crestridge Road, Rancho Palos Verdes, CA 90275; (877) 727-3213
Clearwater at South Bay, 3210 Sepulveda Blvd,Torrance, CA 90505; 424-250-8492; (previously Wellbrook)
Kensington, 320 Knob Hill Ave, Redondo Beach, 90277; (424) 210-8041
Manhattan Village Senior Villas, 1300 Parkview Ave, Manhattan Beach, CA 90266; (310) 546-4062
Silverado Senior Living, 514 N. Prospect Avenue, Redondo Beach, CA 90277; (310) 896-3100
Sunrise of Hermosa Beach, 1837 Pacific Coast Hwy Hermosa Beach CA 90254; 310-937-0959
Sunrise of Palos Verdes, 25535 Hawthorne Blvd, Torrance, CA 90505; 408-215-9608


Independent Living Only

Casa De Los Amigos, 123 S Catalina Ave, Redondo Beach, CA 90277; 310 376 3457
Heritage Pointe Senior Apartments, 1801 Aviation Way, Redondo Beach, CA 90278; (844) 220-4169
Seasons at Redondo Beach, 109 S Francisca Ave, Redondo Beach, CA 90277; (310) 374-6664

Mobile Home Parks

Skyline, 2550 Pacific Coast Hwy, Torrance
South Bay Estates, 18801 Hawthorne Blvd, Torrance
South Shores, 2275 25th St, San Pedro

Advantages and Disadvantages of Co-living

Like any living situation, co-living has its pros and cons. An article from the July/August 2020 edition of NAR’s senior newsletter can help you understand what they are. NAR outlines the advantages and potential disadvantages as well as how to mitigate them.

First, the advantages. Sharing responsibilities in the home is sure to decrease the burden on everyone. It’s especially useful if residents have distinct strengths and weaknesses and can complement each other. Residents in a co-living situation also divide costs, whether it’s mortgages as a homeowner or rent as a renter. Another big plus is the social factor. Humans are inherently social, and our physical and mental well-being depends on a sense of community.

Conflict is bound to arise between any people living together. This is especially true when there are power dynamics or physical limitations at play. Homeowners and renters may battle for a sense of control. Differences in health and mobility may place an unexpected burden on some residents. Luckily, many conflicts can be avoided with written agreements and trial periods. Be sure to interview prospective residents and discuss with them matters of finance, cleaning, visitors and pets, scheduling, and private vs common areas and household items. Background checks and credit checks may also be advised.

Photo by Thanos Pal on Unsplash

Recent South Redondo Sales

We monitor local South Bay real estate activity daily. The data is charted to show the direction of the market in terms of tendency to favor Sellers versus Buyers. Ideal market conditions are in the the center band where both have roughly equal market strength. As you can see, South Bay activity was right down the middle for July. The daily market trend has been more or less level since the beginning of the year, with only a slight upward movement each month.

Cumulatively, since the beginning of the year, the market has shifted from almost being a Buyers’ Market to being almost dead center on the chart. What that means in terms of value can be seen by looking at the most recent three months sales. The list below represents only houses, and only those sold in two neighborhoods. If you’re interested in real time information about homes like yours, or near yours, call and ask about our Neighborhood Notice service.

Image of list of South Redondo Sales from May through June of 2020.
These sales are for a select period and a select area. If you have interest in similar data for your neighborhood, we can provide you with our instant Neighborhood Notice. Call us for details.

How To Safely List Your Home During COVID-19

If you’re worried about listing your home during the pandemic, or if you want to take advantage of the increased inventory and buy a new home, there is a protocol for doing so safely, even in heavily impacted areas of California.

You should discuss with your agent the things that can be done to curb the spread of COVID-19. Some things you can do while others your agent will be better able to do. You can leave interior doors open prior to a showing to ensure visitors don’t need to open doors. Also, you can open windows before and after showings to let in fresh air.

In addition to opening windows for a showing, use disinfecting wipes or spray to clean surfaces that you expect may have been touched frequently, such as countertops, cabinets, light switches, and door knobs.

You and your visitors should wash hands or use hand sanitizer, wear masks or other protective face covering, and practice social distancing. Any disposable protective gear should be discarded when leaving.

The listing agent can discuss the precautions with the buyer and/or buyers’ agent. They can discuss taking care to avoid touching surfaces as much as possible and other safety measures, as well as check to make sure everyone is symptom-free.

The California Association of Realtors (CAR) provides a poster guiding the actions of visitors to minimize risk, which should be posted near the entry. CAR also provides a form called the Coronavirus Property Entry Advisory and Declaration (PEAD) which requires all involved to certify that they are aware of the safety requirements. That form should be signed by the agents, seller, and any visitors.

Be sure to call or email us for more information about safely showing property during the pandemic or regarding other aspects of buying and selling in difficult times. We each have over 25 years of experience in good times and in bad.

Photo by Clay Banks on Unsplash

More: https://journal.firsttuesday.us/farm-health-precautions-when-listing-your-home/72565/

California gets serious on housing shortage

It’s no secret that California has exorbitantly high home and rental prices as well as increasing homelessness. What may be less obvious is that the issue lies in housing construction. There simply aren’t enough affordable units being built.

That’s why California’s Department of Housing and Community Development (DHCD) has established ambitious housing goals for the next decade. In order to be eligible for DHCD funding, a county such as Alameda County would need to plan to build 441,000 more housing units between 2022 and 2030. If that sounds unachievable already, take note that Alameda County is still behind by 188,000 units on its 2022 goal. As far as affordability, Alameda County has similar goals as other large metros for income distribution: about 45% to above-moderate income households, about 15% to moderate- and low-income respectively, and about 25% to very-low-income households. Local jurisdictions are also going to need to adjust their zoning laws to accommodate the new goals.

Photo by Denys Nevozhai on Unsplash

More: https://journal.firsttuesday.us/california-sets-lofty-housing-goals-for-the-decade-ahead/72328/

Co-Living vs Co-Housing: What’s the difference?

Co-living and co-housing are two types of housing arrangements that may be confused. Both are types of “intentional communities” — that is, communities in which the residents share some or all of the space. There are important distinctions in how that space is shared, though, outlined in July/August 2020 edition of NAR’s SRES newsletter.

In a co-living arrangement, all residents share a single dwelling, and the residents are not relatives. Each resident will normally have a private bedroom and possibly a private bathroom. The rest of the rooms are communal, including the kitchen, dining room, living room, and laundry area. This will be familiar to college students living in dorms, but it’s also a potentially beneficial housing arrangement of seniors who may not be able to afford their own housing space or may need assistance.

Co-housing communities, on the other hand, are more private, and likely more expensive. Each party in a co-housing situation may or may not be a single individual; they could be couples or families as well. In any case, the living unit is not shared with other parties, and no room inside the dwelling is communal. Instead, the communal space all exists outside the dwelling, in the form of activity rooms, pools, meeting rooms, or similar such areas.

Photo by Nastuh Abootalebi on Unsplash

Tips for seniors to find a housemate

More and more seniors are looking for a financially viable way to retain their independence as long as possible. Co-living is a promising solution, which means finding the right housemate for you. Here are a few tips to help, taken from an article in the July/August 2020 edition of NAR’s senior newsletter.

Don’t limit yourself to only looking for other seniors to be your housemate. College students are often looking for co-living situations as well, so such an arrangement could be mutually beneficial. You may look for other types of individuals that are not usually home, such as business professionals or frequent travellers. It’s okay if you and your housemate have differences. Learn to appreciate those differences and enjoy your time together.

Make sure they aren’t too different, though. Take the usual precautions to determine whether you and your housemate are compatible, such as shared interests, lifestyle, and privacy expectations. You and your housemate should complement each other’s strengths and weaknesses. Your safety is also important — meet first in a public place, have friends with you, get references and maybe even a background check or credit check.

Photo by LOGAN WEAVER on Unsplash

The barriers to homeownership for Black and Latinx buyers

Throughout the country, Black homeowners pay an average of 13% higher property taxes than White homeowners. This is because of assessed values, which are on average 10% higher in Black and Latinx neighborhoods relative to the sale price. Local governments use higher property tax rates to push for gentrification, which they know new white owners can pay but the minority families already living there cannot. White buyers are also more easily able to appeal their property tax assessment.

The problem is worse in California, where Prop 13 is limiting property tax rates on unsold homes by basing property tax assessments on the value at time of sale. The proposition is designed to protect older residents who are on a fixed income and could otherwise lose their homes. But there are some negative consequences for low-income buyers. As soon as the home is sold, the new buyer is potentially facing significantly higher property taxes than the previous owner was, which prices out some people who are otherwise able to afford the purchase itself. And in the meantime, local government has less revenue from property taxes, so they have to make up the difference elsewhere. This often comes in the form of sales tax, which, because the rate is identical regardless of the buyer’s income, is proportionally a larger burden for Black and Latinx indivduals who tend to be lower-income earners.

Taxes aren’t the only issue Black and Latinx people face, though. When the economy crashed in 2007-2009, minorities were disproportionately affected because of discriminatory lending practices. Lenders would statistically charge higher fees to minorities with equal qualification as whites, or steer minorities towards subprime loans regardless of credit history. This meant they were less likely to be able to pay their mortgages after the crash. With all these barriers to homeownership, Black and Latinx individuals lose out on one of the largest sources of wealth, owning a home.

Photo by Masaaki Komori on Unsplash

More: https://journal.firsttuesday.us/the-unequal-property-tax-burden-on-black-and-latinx-households/72464/

New LEED guidelines established for COVID-19

In order to help combat COVID-19, the U.S. Green Building Council has established new LEED safety guidelines. The new recommendations cover layout, materials, air quality, and smart technology, and are focused on senior care facilities.

The guidelines suggest that facilities renovate to create more single-occupancy rooms. Flexible layouts and multipurpose rooms can help to address both current and future concerns without needing additional space. Uncoated copper alloys are best for knobs and rails, as the copper alloys have an antimicrobial factor. Curtains should be replaced with glass or plexiglass. Countertops and floors should use nonporous or less porous materials such as quartz and Corian for countertops and porcelain, vinyl, or wood for floors. Ventilation is of utmost importance, particularly in bathrooms, and should be maintained regularly. Touchless features go a long way, such as automatic doors, touchless faucets, and voice activated lights.

Photo by CDC on Unsplash

More: https://magazine.realtor/home-and-design/feature/article/2020/07/elder-care-updates-to-counter-viral-spread

Microunits may be permitted in some multi-family areas

California bill AB 3173, introduced in February, would require some cities and counties to permit microunits in areas zoned for multifamily residences. The city or county must have a population of 400,000 or more to qualify for this requirement. Because of the way zoning laws operate, the bill would not apply on city land in a city with a population under 400,000 even if the county has a population over 400,000. The bill also establishes size and affordability requirements for the microunits.

Using 2019 population estimates for cities and the 2010 Census data for counties, the bill would apply in 8 cities and 21 counties. Eligible cities are Los Angeles, San Diego, San Jose, San Francisco, Fresno, Sacramento, Long Beach, and Oakland. It’s possible that Bakersfield, with an estimated population of 384,145 last year, has now passed the 400,000 mark. Eligible counties are Los Angeles County, San Diego County, Orange County, Riverside County, San Bernardino County, Santa Clara County, Alameda County, Sacramento County, Contra Costa County, Fresno County, Kern County, San Francisco County, Ventura County, San Mateo County, San Joaquin County, Stanislaus County, Sonoma County, Tulare County, Solano County, Santa Barbara County, and Monterey County. It’s very likely that Placer County, with a population of 398,329 at the 2010 census, has now surpassed the requirement.

Photo by Lachlan Gowen on Unsplash

Read the full bill: http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB3173

2020 — The First Six Months in South Bay

Faced with the Covid-19 pandemic, a particularly contentious national election, and weeks of nation-wide civil rights protests, It looked like there was no way 2020 could ever be called a normal year. Then we learned about a growing recession. So halfway through the year, what do we see?

Prices – Up and Down

The South Bay is a nice place to live. Here, the real estate market is frequently shielded from the vagaries of the nation at large. And it’s no different this year. In this chart we compare the average sales prices during the first six months of 2019 versus 2020, by zip code. In nearly all cases the average property price is still going up. Torrance was very nearly flat and 90274 actually dropped slightly. (If your zip code or city is not included here, and you would like statistics, give us a call.)

Volume – Mostly down

With prices are still climbing, albeit slower than they were, what about sales volume. Here we see some negative impact. Hermosa Beach is the only local city not experiencing a drop off in sales. In Manhattan Beach, for example, sales are off by 38% for the first six months of this year. South Redondo is off by 35%. Torrance and the peninsula cities are all down by roughly 5-10% from the number of homes sold in the same period of 2019.

My Crystal Ball

Our Market Trend chart is designed to show whether market conditions generally favorable for sellers or buyers. The year started as a buyers’ market and moved even further toward buyers in February. Since then we have been seeing a slow, but steady movement toward a sellers’ market. Things could change dramatically before the year is out, but right now the red trend line indicates the probability the South Bay will be in a sellers’ market before the end of 2020.

Recent changes to California UBI bill

California proposed a Universal Basic Income bill in February, which would be administered by the State Department of Social Services, called AB-2712. This May, AB-2712 was amended, establishing new requirements for eligibility as well as shifting administration to the Franchise Tax Board.

Under the amended UBI bill, the CalUBI Program would be an opt-in program that granted $1000 per month to eligible California residents over the age of 18. The amount is unchanged from the February version, but the amended bill establishes new requirements. The new requirements are:

-Currently reside in California
-Lived in California for the past 3 consecutive years
-Not currently incarcerated in a county jail or state prison
-Income no greater than 200% of the median per capita income in the county of residence

In addition, the amendments make this income non-taxable under state tax law, and won’t affect income eligibility for state programs. Rather than a flat value-added tax of 10% proposed by the original bill, the amended bill gives the California Department of Tax and Fee Administration until July 1, 2024 to report on the feasibility of a value-added tax.

Photo by Tingey Injury Law Firm on Unsplash

See the full bill: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB2712

Recession hits commercial real estate

In May of this year, commercial property sales were at their lowest level in a decade, and commercial renters are struggling to pay rent. Retail and hotel tenants, who were hit the hardest, are current on leases at rates of only 41% and 37% respectively as of June. This also affects the income of the landlords and investors.

Currently, California’s state of emergency is protecting commercial tenants from eviction. However, tenants don’t presently have protection for any length of time after the state of emergency is over. There is a bill proposed, Senate Bill 939, which would protect tenants for 90 more days, and allow 12 months for repayment.

One sector of commercial real estate is notably resilient: industrial. With so many people forced to move to online shopping, industrial properties suitable for e-commerce aren’t struggling nearly as much. Nevertheless, commercial real estate is still not going to be a great investment for the time being. We can expect this trend to continue for a couple more years, as 2022 is the earliest expected year of recovery.

Photo by Wonderlane on Unsplash

More: https://journal.firsttuesday.us/commercial-real-estate-is-reeling/72262/

Homes are selling fast — for now

Even though number of sales is down from last year, the homes that are being sold are actually selling faster. There is plenty of demand and fierce competition, due to low interest rates. High demand and low supply is also keeping home prices up. The average days on market is now 22 nationwide, down from 25 this time last year. Some cities in California are seeing significant decreases, such as San Diego with a whopping 10-day decline, from 25 days last year to 15 days.

It’s not going to stay that way for long, though. New listings are trending upward, which may feel like the beginnings of a recovery, but it’s more complicated than that. If supply starts to outpace demand, high house prices are not going to be sustainable. Sellers will be forced to either accept a lower price or wait for a better time. With many buyers still not having recovered from the economic chaos of COVID-19, it will be some time before demand can catch up to increasing supply. Recovery won’t truly start until California reaches the bottom, projected to be in 2022.

Photo by chuttersnap on Unsplash

More: https://journal.firsttuesday.us/despite-historically-low-sales-volume-homes-are-flying-off-the-market/72266/

Mortgage application rejection on the rise

I’ve previously mentioned that COVID-19 and the current economic downturn have resulted in an increase in mortgage forbearance requests. But what about mortgage applications? Interestingly, even as fewer people are able to pay their mortgages, people are still applying for mortgages, looking to take advantage of the current low interest rates on mortgage loans. And getting rejected at a much higher rate.

Lenders will always want to ensure that people are able to pay back the money they borrow. Obviously if the borrower has a mortgage in forbearance, well, that borrower doesn’t stand a great chance of being able to pay back a new mortgage. But even beyond that, lenders have been tightening restrictions in the wake of lessened economic stability. They are requiring higher credit scores, larger down payments, and more savings. Someone who was largely unaffected by the economic downturn may think they have a good chance at getting their mortgage loan approved. Not necessarily, if they were basing their expectations on old lender restrictions. Lenders are going to need to find the right balance between encouraging borrowers — since that’s how they make their money — and avoiding risky lending practices.

Photo by Cytonn Photography on Unsplash

More: https://journal.firsttuesday.us/forbearance-requests-rise-while-mortgage-credit-availability-falls/72172/

A look at the housing future of Gen Z

I recently wrote regarding the influx of young adults living with their parents and grandparents during the past few months. These young adults belong to Generation Z. Though economic factors were not the only thing at play in this trend, they’re still a big part of it. So the current situation of this group can help us to understand the implications for housing for the entire generation.

We don’t yet know exactly how long this economic slump will last, but we have some guesses. The optimistic analysis is that the economy will begin to recover as soon as the general population has access to a COVID-19 vaccine, which will allow them to resume their normal lives as both producers and consumers. But housing is expensive, perhaps prohibitively so for low-income workers, and it’s still going to take some time to be able to save enough money for a house. This is especially true when we recognize that a downturn was already coming before COVID-19 hit — the pandemic exacerbated the problem, not created it, so eliminating the pandemic won’t fully eliminate the problem. We may be into the next decade before Gen Z is back on track for home ownership.

Photo by Maria Ziegler on Unsplash

More: https://journal.firsttuesday.us/young-adults-flock-back-to-the-nest-how-long-will-they-stay/72174/

Living with parents is the norm for young adults

During the months of March, April, and May, approximately 2.9 million adults in the US moved in with parents or grandparents. Many of these were college students whose classes were cancelled due to the COVID-19 epidemic, but the enormous spike during those months is also a result of the economic downturn. Young adults aren’t able to justify the expense of living on their own during these times, even if they are able to afford it, which many aren’t.

An adult living with their parents has been stigmatized in the US, seen as the mark of a lazy or irresponsible person. Current events are demonstrating that this isn’t necessarily the case. And the numbers also disagree — in fact, it first became the most common living arrangement for young adults all the way back in 2014. This isn’t a new trend, and it’s not a bad thing. The upward trend may have started with economic imbalances, likely the Great Recession in the late 2000s, but this serves only to obscure the fact that non-economic factors are also at play. More people are going to college and graduate school. Couples are marrying later and having their first child later. The timeline of a young adult’s life has been shifting for nearly 15 years. Of course they would be buying homes later as well.

Photo by Nikola Saliba on Unsplash

More: https://www.theatlantic.com/family/archive/2020/07/pandemic-young-adults-living-with-parents/613723/

Don’t let unemployment shatter your home-buying dreams

Record-high unemployment since the Great Depression is worrying for people looking to buy a home. And it’s true that it’s very difficult to buy a home while unemployed, since lenders are are looking for stable income. Unemployment income is considered temporary income, which lenders aren’t going to look at. Even once you find a job again, lenders typically want two years of continuous employment. Gaps in employment older than two years don’t impact your chances of lending negatively, though, so that won’t be a concern in a long run.

Another problem is that lack of income could put a strain on your credit score. While you will eventually become employed again, changes to your credit score can be much harder to erase. In order to maximize your chances of getting a loan in the future, you should do as much as you can, starting now, to keep your credit score intact. Always make minimum payments if possible. Ask your landlord and credit companies about other payment plans, deferment, or forbearance. Cut back on unnecessary spending. The good news is that even if your credit score does take a dive, once you’ve settled the debts and start to rebuild your credit, it shouldn’t take too long to get your credit score back up — roughly six months to year, meaning you may have already recovered your credit before lenders will consider your employment to be stable.

Photo by Bermix Studio on Unsplash

More: https://www.realtor.com/advice/finance/how-unemployment-can-affect-your-plans-to-buy-a-home/

Coronavirus exposes the wealth gap

For some people, the impact of coronavirus was minimal and short-lived. These are the people who had job security and a place to work from home, enabling them to continue to earn money while many people were left unemployed or temporarily out of work. Many low-income workers, a group with a large percentage of minorities, were already priced out of owning a home before COVID-19. The economic shutdown exacerbated this issue, while those able to live in relative comfort are looking to enjoy low interest rates by purchasing additional homes, beyond what they already own. This has meant that the housing market has started to rebound relatively quickly, especially in tech centers such as San Francisco, since those with money who are most able to engage in the process were only minorly inconvenienced at the same time that lower-income people fall further behind.

Photo by Sean Pollock on Unsplash

More: https://www.forbes.com/sites/brendarichardson/2020/06/22/coronavirus-housing-rebound-exposes-the-wealth-divide/

Eviction laws under the Tenant Protection Act

The Tenant Protection Act of 2019 (TPA), enacted last fall, establishes regulations for just cause evictions. The laws primarily apply to apartment units, but may affect other types of residences in certain scenarios. Just cause is required if all tenants have lawfully occupied the residence for 12 consecutive months, or if at least one tenant has lawfully occupied it for 24 consecutive months. In addition, the landlord may be required to provide relocation assistance for no-fault just cause evictions.

The TPA provides several forms used for various types of just cause evictions. The primary distinction is between at-fault and no-fault evictions. The possible reasons for a no-fault eviction are intention to occupy, withdrawal from the rental market, demolition or renovation, or if a government agency determines the property to be unfit for habitation through no fault of the tenant. At-fault evictions are much more complex, and may require either a Three-Day Notice to Perform or a Three-Day Notice to Quit. The latter is also the next step should the tenant not respond appropriately to the former. At-fault just cause may include a breach of lease terms, a default on payment, or criminal activity, among other possibilities.

You can find more information about the TPA at https://journal.firsttuesday.us/2020s-tenant-protection-act-part-i-just-cause-eviction/72036/, or you can call or email us for more information or assistance regarding tenancy or evictions.

Photo by Jose Alonso on Unsplash

Forbearances down overall, but not for private loans

Data has been showing that forbearances on mortgage loans have been trending downwards in June from the peak on May 22, albeit at a slow rate. However, this doesn’t tell the whole story. The downward trend totalling 158,000 is almost entirely from loans backed by Fannie Mae or Freddie Mac or FHA/VA loans. Loans backed by banks or private securities are actually up 6000.

This trend points to trouble particularly for self-employed borrowers. Even with some people returning to work or working from home as lockdowns are phased out, in an uncertain economy, self-employed people don’t have the same reliability of income. Most private loans are held by self-employed workers. Without a stable income, self-employed people aren’t certain whether or not they’ll be able to pay back their mortgages until the economy re-situates itself, so more of them are requesting forbearances.

Photo by Jp Valery on Unsplash

More: https://www.cnbc.com/2020/06/19/coronavirus-mortgage-bailout-shrinks-further-but-bank-held-loans-are-faring-worse.html

June COVID-19 Impact Update

Two months after reopening, the California economy is recovering unevenly, but recovering nonetheless. The housing market is a strong leader in the recovery process, with low interest rates contributing to a surge in activity after the last two months’ lull. The recovery will take time, though. The UCLA Anderson Forecast predicts a GDP decline of 42% in this quarter before easing back up 11% and then 7.6% in the next two quarters of this year. The total change from last year is expected to be a decline of 8.6%.

May was probably the trough for home sales, and they will pick up in the coming months. The extension of the foreclosure and eviction moratorium coupled with all-time low interest rates should allow buyers to regain their bearings quickly, and thus demand hasn’t suffered. Low supply and and a smaller than expected decrease in unemployment claims could point to a slower pace, but shouldn’t prevent recovery.

Call or email us if you want more information or are ready to buy or sell. Also, if you live in the South Bay or are interested in data about the area, stay tuned for a special South Bay update in early July.

Photo by Eric Rothermel on Unsplash

More: https://www.car.org/knowledge/pubs/newsletters/newsline/covid62420

Scams are an increasing threat to online real estate

Don Sabatini, a real estate agent in Willow Glen, CA, relates his true story of his client becoming the victim of a digital real estate scam. The COVID-19 outbreak meant that Sabatini had to conduct much of his business via email, though he and his client agreed to present the cashier’s check in person, while following social distancing guidelines. Despite this agreement, a scammer had been looking in on the email exchange. The client received several emails posing as the title agent, lender, and even Sabatini himself, increasingly threatening in tone. The scammer told the client that the offices will likely be closed, so she should simply wire the money. Feeling pressured by the barrage of threatening emails, she did so. The client and Sabatini realized she’d been scammed the next afternoon, but by then some of the money was irreparably lost. Fortunately, she was able to recover most of it, losing only $2000, and complete the transaction.

This story isn’t an isolated incident. The most recent data is from 2018, with the FBI estimating 11,300 people became victims of an online real estate scam in that year alone. It was an increase of 17% from 2017. Even without data from this year, you can imagine that with current pandemic increasing the rate of online real estate transactions, the rate of scam attempts is also increasing.

We are still conducting business, so don’t hesitate to call or email us if you are looking to buy or sell, but do be careful of scams.

Photo by Markus Spiske on Unsplash

More: https://www.mercurynews.com/2020/06/15/new-pandemic-concern-digital-real-estate-scams/

Investors are Still Eyeing Real Estate

According to a Gallup poll of favorite investment options, real estate remains at the top where it’s been since 2013, currently at 35%. It has been over 33% since 2016. After dropping by 6% since last year, the popularity of stocks and mutual funds is down to 21%, its lowest since 2012. While the percentage favoring savings accounts and CDs, gold, or bonds has increased slightly, their numbers remain low at 17%, 16%, and 8% respectively.

Even stockowners are now less likely to favor stocks as the best investment, but that doesn’t mean stocks are going away. Stock ownership is still stable at 55%, and hasn’t veered too much from that number since it started falling off during the Great Recession. It may not be the best option, but the number that think stock investment is a good option remains nearly identical to the number that think it’s a bad option.

If you’re interested in investing in real estate, we can help! Call or email us about buying or selling investment property.

Photo by Chris Liverani on Unsplash

More: https://news.gallup.com/poll/309233/stock-investments-lose-luster-covid-sell-off.aspx

Foreclosure and eviction moratorium extended

As a result of the COVID-19 outbreak, the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac (the Enterprises), had instituted a moratorium on foreclosures and evictions for Enterprise-backed single-family mortgages. The moratorium was scheduled to end on June 30th, but on June 17th, the FHFA announced that the date will be extended to August 31st. The FHFA plans to continue to monitor the situation and make further adjustments as needed.

Photo by Mangopear creative on Unsplash

More: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Extends-Foreclosure-and-Eviction-Moratorium-6172020.aspx

May 2020 report demonstrates slowdown

The California Association of Realtors (CAR) released their May sales and price report on June 16th, and the numbers are showing a definite slowdown. Existing single family home sales totalled 238,740 in May, down 13.9% from April and down 41.4% from last May. The median home price was $588,070, a drop of 3% from April and 3.7% from last year. May also saw a year-to-date statewide home sale decrease of 12.9%. The Bay Area seems to have been hit the hardest. The impact of the COVID-19 pandemic was California home sales falling to the lowest level since the Great Depression.

The good news is that May was probably the worst of it. The market shows signs of recovering, especially buyer demand shooting up from record lows. One county, Del Norte, even reported a year-over-year increase in sales, and 31 reported a year-over-year increase in prices. Interest rates are also down from last year.

Interested in data for your area? You can find the full table of statistics at https://www.car.org/aboutus/mediacenter/newsreleases/2020releases/may2020sales, and you can also call or email us for more information.

Photo by Adeolu Eletu on Unsplash

Expanded rent control to appear on 2020 ballot

It’s no secret that California has a problem with rent prices and rental availability. Which solution to pick remains controversial. Rent control is the most immediate solution, but is a stopgap measure that can potentially do more harm than good over long periods. Building more affordable housing is a more permanent solution, but is a long-term plan with vocal opponents.

Currently, rent control is governed by the Costa-Hawkins Rental Housing Act, which prohibits rent control for housing units with a single title or that were first occupied on or after February 1, 1995. Proposition 10 appeared on the ballot just two years ago, seeking to repeal Costa-Hawkins and give more control to individual cities. The measure didn’t pass. Seeing the response to Prop 10, a new initiative, the Rental Affordability Act, decided to meet opponents halfway. Rather than entirely repeal Costa-Hawkins, this new measure seeks to amend it with a sliding timescale of 15 years, rather than a fixed year of 1995, to prevent the number of homes qualifying for rent control from remaining static.

Increasing the number of available rental units is a more appealing solution. It takes time and effort, though. California’s legislature has already adjusted laws regarding zoning, parking and landlord conduct, but it hasn’t been enough. Builders also need to do their part to make these plans a reality, and residents often oppose plans to build large, multi-family residences that could potentially decrease average home value in the area.

If you have any questions about rent control or finding a rental property or tenant, call or email us. We’d be happy to help!

Photo by Gabrielle Henderson on Unsplash

More: https://journal.firsttuesday.us/2020-ballot-initiative-seeks-to-expand-rent-control-in-california/71958/

Impact of COVID-19 on current market

As of June 10, while the California housing market has started to recover, it appears that recovery is slowing, not speeding up. California officially entered the recession in February, and we’ve come a long way since then, but there’s still plenty more to go.

Average home sales per day decreased in the second week of June following a modest increase in the first week, and the overall trend has been downward. Pending listings are still going up, but by less than 3% in 3 of the prior 4 weeks before June 10. New listings have been mostly flat. Two-thirds of buyers are expecting to get lower prices than they’re getting, and more of them are backing out because of financial considerations, despite high demand.

On the bright side, sellers are more optimistic. 40% of sellers believe it is a good time to sell, up from 29% in May, though still far below the pre-crisis level of 60% or more. Sellers recognize that while buyers may not have the funds they wanted, they’re still looking to buy. More buyers are applying for mortgages while mortgage forbearance has dropped from almost 1.1 million in mid-April to only 34 thousand in early June, and home showings are finally above the levels in 2019 and still going up.

Recovery has certainly slowed, but we’re going in the right direction. Now is a good time for both buyers and sellers. Call or email us and we’ll discuss business.

Photo by Frank Busch on Unsplash

More: https://www.car.org/knowledge/pubs/newsletters/newsline/covid61020

Home offices now in high demand

As I’m sure you already know, the lockdowns from COVID-19 have resulted in many workers needing to resort to working from home — potentially as many as 40%. This means that workers want a space in their home to work comfortably, something many homeowners and especially renters don’t have. Spaces not designed to be a home office can be inefficient or distracting, leading to lower productivity, so extra space for a home office is increasingly becoming a priority for buyers’ next purchases.

A survey by Zillow asked people working from home what their current configuration is and how it would affect future purchasing decisions. The survey found that only a third of those working from home have a dedicated home office space, and two-thirds needed to reconfigure existing rooms. Respondents’ top reasons to consider buying a new home were either a dedicated office space or just more space in general, letting other historically popular considerations like location and price fall by the wayside. Even after the pandemic ends, buyers are are looking to make their next purchase futureproof. Sellers and construction companies are also noticing the trend.

Are you also looking for dedicated office space or extra rooms for your next home? Does your own home fit the bill, and you want to sell? Whether you’re buying or selling, we can find a match for you. Call or email us!

Photo by Roberto Nickson on Unsplash

Housing Recovery Will Take Both Time and Action

According to a recent poll of readers of the Real Estate journal First Tuesday, the most optimistic recovery date from the current recession is late 2020, with 30% of respondents hopeful for a quick rebound. A quarter of respondents believe that recovery will be tied to a COVID-19 vaccine, which is predicted to arrive no earlier than mid-2021. 45% don’t expect recovery until 2022.

Benjamin Smith of First Tuesday agrees that a COVID-19 vaccine is important to recovery, but warns that there are other aspects at play. Real Estate as a business does depend heavily on in-person interactions, even though much of the work can certainly be done online or via email, and lockdowns have, without a doubt, slowed down business. Smith is careful to note, however, that the market was already on a downturn before COVID-19 hit, merely speeding up and exacerbating an impending recession. Two important factors in the downturn were falling inventory and insufficient construction.

While a vaccine can help open up agents, buyers, and sellers to safely meet up and discuss business, the underlying causes still need to be addressed, and people will need time and government intervention to recover their finances. This places recovery almost certainly later than mid-2021, and very likely further out. Fortunately, low interest rates mean buyer purchasing power will be relatively high once they regain their financial stability, meaning home prices aren’t likely to suffer as long as interest rates remain low.

Photo by Jens Behrmann on Unsplash

More: https://journal.firsttuesday.us/the-votes-are-in-housing-market-slated-for-a-late-recovery/71917/

What You Should Know About Credit Inquiries

Any time your credit report is reviewed, a credit inquiry is automatically added to your report. Your personal credit report lists all these inquiries for two years. There are two main types of credit inquiries: a hard inquiry, also called a hard pull, and a soft inquiry or soft pull. There are also personal credit inquiries.

Applying for credit or doing something that requires a credit check, such as applying for phone service, renting, or possibly taking a job, triggers a hard pull. Establishing business credit for the first time will do this. A hard inquiry reduces your credit score by up to five points, albeit usually for a short time. Sometimes multiple inquiries within a short period, such as looking for the best rates for auto insurance or a mortgage over 30 days, counts as only a single hard inquiry. Be cautious about multiple hard pulls in a short time, though. Lenders can see hard inquiries on your report and tend to interpret this behavior as high risk.

When you receive a pre-approved credit offer, chances are there was a soft inquiry on your credit report. Businesses use these to know your credit score for promotional information, as do banks and lenders to review your account to see if you qualify for new offers. These usually happen without your knowledge, though you can see them on your personal credit score. Fortunately, others cannot see them and they have no effect on your credit score. In addition, although applying for rent usually triggers a hard pull, renters can sometimes request a soft pull themselves to be sent to their landlord to avoid a hard pull. You can call us for more information about requesting a soft pull as a renter.

A personal credit inquiry is how you see all the information about your credit report. Your credit score and all inquiries, hard and soft, are visible to you at any time, and you can request your report for free once per 12 months at https://www.annualcreditreport.com/index.action. This is a good idea before applying for credit and also periodically to make sure it’s accurate and up to date. Visit the credit reporting agency’s website if you encounter an error.

More: https://www.sba.gov/blogs/credit-inquiries-what-you-should-know-about-hard-and-soft-pulls

COVID-19: A boon for the rural real estate market?

As we recover from COVID-19, experts are saying it may benefit the rural real estate market. California Association of Realtors deputy chief economist Jordan Levine explains why. Levine notes that rural housing is generally more affordable, which may become one of the most important decision factors as people are recovering from temporary unemployment and business losses. In addition, more and more businesses are looking at a work-from-home model, which will enable employees to live away from urban commercial centers and not have to commute long distance to work.

Real estate personnel working in rural areas seem to agree. Cindy Young, president of Shasta Association of Realtors, predicted an increase in business since their first virtual meeting after the stay-at-home order. Real estate agent Sandy Dole, who works in Shasta County, didn’t experience any drop at all and is actually on pace to surpass last year.

Despite all this, the outbreak did mean California’s market overall experienced its worst month-to-month decline in over forty years. The crisis isn’t over, even in rural areas like Shasta County. The overall market is expected to be sluggish for the next couple of months, with no solid predictions beyond then. Market declines invariably mean lower prices, at least in some areas, while others perform better. 

If you’re thinking of buying or selling, and are looking for a good price on a comfortable rural home, send us a note on our contact form, or give us a call.  We are active agents throughout California.  At the moment, we are seeing some very attractive properties in Ventura and San Diego counties.

Photo by Karol Kaczorek on Unsplash (cropped)

$ Money Matters $

The Federal Reserve Bank (the Fed) moved to lower the federal funds rate by a half-point to a range of 1% to 1.25% March 3 in response to the “evolving risks” of the COVID-19 corona virus outbreak. The Fed doesn’t directly impact housing loans, but they generally move in tandem.

Mortgage rates in the U.S. roughly track the yield on the 10-year Treasury note which has been dropping as the corona virus epidemic expanded. As the yield on the 10-year note drops, there is typically a drop in mortgage interest rates.

Yesterday, purchasers and refinance borrowers were looking at rates of about 3.7%. Today that’s about 3.5%. Some lenders are forecasting that rates could drop as low as 3% before COVID-19 is controlled.

Some analysts report that the stock market anticipates a least a quarter-point rate cut at the Fed’s meeting in April.

Around the world some other central banks have dropped rates as well. Since consumer spending is a large measure of our economys, there is reason to press for more cuts.

In the words of the President, @realDonaldTrump, “The Federal Reserve is cutting but … more easing and cutting!”

Photo by Vladimir Solomyani on Unsplash

Salad as the Main Course

My favorite meal is a fresh salad, transformed to a main course with the addition of a grilled, or roasted, or sauteed piece of meat or seafood. This recipe is a more sophisticated version, with colorful and tasty endive taking the place of standard greens.

Salmon is a great go-to for this dish. If you’re not fond of the taste, or it isn’t readily available, there are several delicious options. Mahi-mahi or rockfish work well, as will chicken breast, or even scallops. The goal is the freshness of the salad combined with the hearty flavor of your meat, poultry or seafood.

Ingredients

3 heads red Belgian endive
3 heads Belgian endive
2 crisp and juicy apples
Juice of 1/2 Meyer lemon
2 cups (2-3 oz.) of frisée and/or arugula greens, torn to bite-size
1/2 cup walnut halves or pieces, toasted
6 tbsp. white vinaigrette dressing (recipe below)
1 tsp. finely cut chives
4 fillets of a firm fish, e.g., salmon, mahi mahi, or rockfish

White vinaigrette dressing
1/4 cup white balsamic vinegar or fresh lemon juice
1 tbsp Dijon mustard
1/4 shallot, peeled and minced
2 tsp. honey (optional)
1 pinch finely chopped garlic
3/4 cup extra virgin olive oil
Salt and pepper, to taste

Instructions

Salad
Wash and dry endive and apples. Cut endives lengthwise into julienne strips. Slice apples and cut into julienne strips. (If made in advance, you can preserve the color of the apple with a spritz of lemon juice.) Tear the frisée and/or arugula greens into bite-size pieces. Set aside.

White balsamic vinaigrette dressing
In a bowl or large measuring cup, whisk together all the vinaigrette ingredients and set aside.

Salmon: Heat olive oil in a sauté pan over medium-high heat. Score skin and season fish with salt and pepper. Place skin-side down in hot oil. Cook until skin is crispy, shaking pan to prevent fish from sticking. Turn fish over and continue cooking until medium rare. Remove and keep warm. (Alternatively, salmon may be grilled or baked.)

In a large bowl, combine endives, apples, greens, walnuts and vinaigrette, tossing gently. Season to taste and center on plate. Top the salad serving with one fillet each and sprinkle with chopped chives.

Photo by Jason Briscoe on Unsplash

Pundit Quotes on the 2020 Real Estate Market

Usually this time of year I stick my neck out and make some forecasts about the local market in the coming year. What I’ve discovered is my quotes are boring by comparison to those made by the pundits. So, this year I decided to publish some of the more exciting projections by people who claim to know what’s going on.

Let’s set the stage by noting that the real estate market has been notoriously stable for the past few years. Stable, and on a very slight decline. The charts have shown volume and prices all within the normal range, with tiny losses increasing as time goes on. Several pundits have pointed to these stats and projected a recession on the horizon.

At the same time, as I point out in another article, this is a presidential election year. Can anyone remember an election year when the economy failed? It doesn’t happen very often. Let’s look at some quotes.


“Were we to have a recession, I’d argue housing would provide a cushion because the shortage of supply at the entry-level suggests builders could actually continue to build.”

Doug Duncan, Fannie Mae’s chief economist

Well now, I know quite a few builders and developers. But, I don’t know any who will start a project when prices start dropping. As a theory it sounds great, but I think it needs further study.


“While the housing crisis is still fresh on the minds of many, and was the catalyst of the Great Recession, the U.S. housing market has weathered all other recessions since 1980.”

Odeta Kushi, deputy chief economist at First American

Kushi says, “…since 1980.” So he had to look back 40 years to find good news?!?!


“Housing people are the most optimistic people, but it takes a lot of optimism to buy a house and tie up your income for 30 years.”

Nela Richardson, investment strategist at Edward Jones.

He’s right, at least as far as purchasers would go. Most tenants wouldn’t be very optimistic after renting for 30 years.


“The vast majority of housing economists project that mortgage rates will remain below 4% in 2020.”

Jacob Passy, personal-finance reporter for MarketWatch

Ha! Like we’re going to see the Fed argue with President Trump! He tweeted and they gave. It’s an election year!


“In the Los Angeles metropolitan area (which includes Orange County), the share of homes that sold for more than the listed price dropped from nearly 35 percent in 2018 to 28 percent in 2019.”

Elijah Chiland, reporter for Curbed, Los Angeles

There is a large difference between our little corner of the world here in 90277 and Los Angeles County in general, and it extends to the LA Metro and to California and to the nation as a whole. In 2019 only 17% of homes sold in 90277 sold for over asking. It is different here. Many brokers/agents have found that the statistics generated by state and national pundits are simply not applicable in the Beach Cities.


Here’s CAR betting on a positive market for the year! It’s an election year, and I can see this happening!

2019 vs 2020 in 90277

Last year saw property prices in 90277 drift down a little. Looking at a five year picture of shifting prices we see that from 2014 to 2018 there was a clear upward trajectory. By the end of 2019 the average price had dropped and the median price followed.

The final numbers for 2019 show the decline continuing and even growing. The median was only down .4%, but the average was down 7.1%, an even larger drop than projected for the fourth quarter of the year.

On a more positive note, 2019 showed a 16% increase in sales volume for 90277.

The downward shift in prices and upward trend in volume of sales are consistent with the overall greater South Bay area. The upper end of the local market is showing signs of having reached an apex in prices, which has stimulated more listings and more sales.

At the same time, the moderate and lower priced neighborhoods have maintained price increases. Prices of lower priced homes are still climbing, but at a slower rate. Sales on the other hand, declined from 2018, or were unchanged.

So what’s the outlook for 2020? To get an early look, we compared January 2019 to January 2020. The statistics show both prices and sales climbing. Sales for the month were 22% greater than January last year. Average prices increased by 14.7%, while median prices were up 5.9%.

All right, so things are looking pretty good, at least in the Beach Cities/South Bay area. But, let’s face it. This is an election year. The status of everything is subject to change in mere seconds, based on the latest poll/post/tweet hitting the internet. There’s not much we can do about the politics, but if you’re looking for a quick update on the real estate market, give us a call. Better yet, take out a free subscription to BeachChatter and we’ll send you a note to keep you abreast of the latest news. There should be a subscription form in the side column. And, we don’t sell your data!

Upgrade Your Home for Senior Living Convenience

As if there has ever been a doubt, surveys clearly demonstrate that those of us in the Baby Boomer generation want to maintain our independence and remain in our family homes as long as possible. The older we get, the more adamantly we pursue that goal. Along with us getting older, our homes are also aging. Things we loved about the house when we were younger are not so lovable now that we’re less agile and adaptable than we were those many years ago.

That upstairs kitchen, with the tremendous views–getting up those stairs becomes a dreaded task when joints become creaky and complaining. Likewise, getting down on hands and knees to reach into the back of a corner cabinet can make one curse the arthritis creeping in on us.

Photo by AndriyKo Podilnyk on Unsplash

In some cases the solution is medical. Doctors can literally rebuild a body today, replacing old, failing parts with new technological wonders. On a more practical level, rebuilding our homes to meet our changing needs can be easier and less expensive. Depending on the structure and your needs, you may be able to adapt the family home to your new lifestyle demands more readily than you can change residences.

Elevator
Photo by Martin Péchy on Unsplash

In our experience, inability to climb stairs is the most expensive and challenging difficulty to remedy. In multi-story homes, options include installing an elevator or adding a chair lift, while in single story homes, it may be as simple as adding a ramp at the exterior entrances.

Elevators may add up to tens of thousands of dollars, but don’t let that deter you from investigating. Sometimes the architect has designed in a space that’s just waiting to be used. Besides, it’s probably less expensive than moving the kitchen downstairs. Though not as aesthetically appealing, a chair lift can be a relatively inexpensive solution, costing only a few thousand dollars.

In terms of cost and difficulty, bathrooms and kitchens come right behind stairs. The key problems are usually related to getting in and out of bathtubs, and manipulating faucet knobs. Whether the result of declining strength, arthritis, or another aspect of aging, these are literally pains we can avoid.

Walk-in bathtubs are available, but very expensive, and most of us haven’t been in a tub since we were children. The most common solution is a “curbless” shower which eliminates the pain and the trip hazard. Adding a seat to your shower is a minor effort for the contractor and a major plus for you. Any update of your faucets will probably solve the knob issue, since nearly all manufacturers have shifted from knobs to levers to meet the needs of the disabled.

Many of the complaints we have as aging boomers have been addressed by manufacturers of “add-on” or “after market” products. Roll out drawers, pull out shelves, lazy susan corner units and similar tools can be wonderful. For the most part these fixes are inexpensive and easy to install. None of them will make us any younger, but with them we can all feel better about growing older.

Main Photo by Jason Pofahl on Unsplash

Growing Old at Home

You knew someone would conduct a survey asking senior citizens where they would prefer to live as they grow older. I’m sure you also knew the answer before the survey was done. There’s no place like home!

A study by the American Association of Retired Persons (AARP) shows an overwhelming 76% of seniors aged 50+ want to stay in their current home and 77% want to remain in their community as long as possible. Sadly, only 46% expect they’ll be able to stay in their home. Another 13% believe they’ll be able to move to a different residence in the same community.

How strongly do those surveyed feel about staying in their home? Over half wanted it to the extent they were willing to share their home (32%), build an accessory dwelling unit (31%) or join a “village” that provides services to enable aging in place (56%). (We plan to explore “senior villages” in a future article.

“half of the survey respondents indicated they would be
willing to share their home simply for companionship”

In an interesting sidelight, half of the survey respondents indicated they would be willing to share their home simply for companionship. The strength of this psychological need is supported by anecdotal tales we’ve all heard about retirees who move in together for companionship, but remain single for financial reasons. Even more telling is the response of 30% who reported lacking companionship, feeling left out or feeling isolated.

About one third of those surveyed expect their existing home to require major modifications. Most of that group, roughly 25% of the respondents, are not willing or able to make those changes. As a result, they plan on relocating completely to a new area. Moving to a new area can offer a tremendous incentive in that the average price of housing varies dramatically from state to state across the nation.

“less than 25% of seniors are attracted to senior developments”

Some active adult communities, designed for the 55+ cohort, offer pools, gyms, coffee bars, workshops, golf courses and cooking classes. Despite all the amenities, less than 25% of seniors are attracted to senior developments.

In many cases, the problem lies with the lack of social interaction. The AARP concluded “creating a social environment that appeals to everyone is a key part of forming strong, livable communities.” The group cited results showing over 80% of seniors felt it important to socialize with friends and neighbors; engage with both young and old residents; volunteer in the community; and continue formal education.

While we’re looking at the things seniors desire, it’s equally interesting to see what it is they don’t want. On the list of “least important community features” we find that over 75% of the respondents don’t want “Activities specifically geared towards adults with dementia.” Nor are they interested in “Local schools that involve older adults in events and activities,” or “Activities geared specifically towards older adults.” This further reinforces the idea that seniors want to interact with both young and old people.

There are those who say “Children will keep you young.” This survey would suggest a whole lot of us believe that maxim.

Photo by Vidar Nordli-Mathisen on Unsplash

What is the California Department of Aging?

The California Department of Aging (CDA) is practically unheard of. I recently discovered it and knew immediately we would have to publish the information for our Beach Cities seniors. The Department administers programs that serve older adults, adults with disabilities, family caregivers, and residents in long-term care facilities throughout the State. These programs are funded through the federal Older Americans Act, the Older Californians Act, and through the Medi-Cal program.

To get things done, the CDA contracts with the network of Area Agencies on Aging (AAA), which are organized roughly along county lines. The local AAA directly manages services that provide meals; support for family members, and to generally promote healthy aging and community involvement. In this article we’ll focus on meals and family help, both of which are elements of “Aging At Home.”

“Meals On Wheels”

Here in Los Angeles County, seniors are eligible for home delivered meal service if they meet the following basic requirements. (For detail, see http://wdacs.lacounty.gov/ or call them at (213-738-4004.)

  • Persons 60 years of age or older who are homebound because of illness, incapacity, disability, or are otherwise isolated regardless of income level
  • Spouses and caregivers of eligible participants if it is beneficial to the participant
  • Persons with a disability who live at home with a participant

The Home-Delivered Meals Program also provides nutrition education, nutrition risk screening and nutrition counseling.

Being a senior citizen can be very challenging in our society. Even with family care givers, there can be a lot of questions, and a good deal of confusion. High on the priority list is finding ways so family members can help as much as possible.

Many times close relatives would be happy to stay home and help, but a formal job leaves no time to do so. The In-Home Supportive Services (IHSS) program is designed to provide training and income for a person who provides services to family members under the program.

Getting paid to take care of a family member

Are you caring for a senior member of the family? Or, are you a senior caring for a grandchild? Either way, you are performing a valuable service, and one you can be paid for! The California Department of Social Services (CDSS) can help you with qualifying for a paycheck in 90 days or less. The best part–it can be tax free income! The requirements:

  • Adult family members or other informal caregivers age 18 or older providing care to individuals age 60 or older
  • Adult family members or other informal caregivers age 18 or older providing care to individuals of any age with Alzheimer’s disease or related disorder with neurologic and organic brain dysfunction
  • Relatives, not parents, age 55 or older providing care to children under the age of 18
  • Relatives, including parents, age 55 or older providing care to individuals of any age with a disability

CDA also contracts with agencies that certify approximately 242 Adult Day Health Care Centers participating in the Medi-Cal Community Based Adult Services (CBAS) Program.

So every Californian has the opportunity to enjoy wellness, longevity and quality of life in strong healthy communities, CDA actively works to ensure:
– transportation,
– housing and accessibility
– wellness and nutrition,
– falls and injury prevention,
– dementia care.
For additional information, contact the CDA at https://www.aging.ca.gov/Programs_and_Services/ or you can locate the AAA in your area by selecting your county on the Find Services in My County page of this website.

Photo by CDC on Unsplash

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Planning to Grow Old in the Family Home?

In the course of a week I talk to a lot of people who are over 55 years of age. Most of them live in the home where they raised their family many years ago. And as any real estate agent or broker can tell you, most plan to live out their life right there.

And why not? They’re intimately familiar with the house, and probably with most of the neighbors. In many cases, the house is already paid for, so a mortgage won’t drag down their retirement income. The house may be a little bigger than needed, but that just means it holds more memories–right?

Senior Housing Challenges

Maybe, and maybe not. As we grow older, aging adds new challenges for our bodies. We’re not able to move around as easily, can’t climb stairs like we used to, and we don’t keep up with chores like we used to.

Typically, one of the first things I notice when visiting a 55+ client is the condition of the paint under the eaves of the house. As seniors we’re constantly being admonished to “stay off ladders” or “don’t risk falling and breaking bones.” Needless to say, very few of us get those eaves painted. Often those same physical limitations extend to the gardening tasks we used to love, and to cleaning the gutters of fall leaves.

Aging in place, rather than moving to a less challenging home, will work out well for some seniors, and prove impossible for others. Some people may be able to modify their homes to allow themselves to remain. (See Remodels for Aging in Place in the summer 2019 issue and at https://www.beachchatter.com/2019/09/11/remodels-for-aging-in-place/.)

These changes could include adding: ramps, railings or grab bars; stair lifts; plus additional safety and security features. Making our homes safer as we age is important. It isn’t the whole story, though. We still have to find someone to do the painting, clean the gutters, and make the little fixes we used to do ourselves.

Depending on the need, modifications can be cost prohibitive, and even when they are made, some seniors may still need the assistance of a caregiver. In the end, dollars and cents will weigh heavily on the decision. It may make more sense to downsize, move closer to family members who can help — perhaps into a family member’s casita — or relocate to an active adult community.

Designed for Active Adults

Recent years have seen considerable growth in residences designed and built exclusively for residents who are 55+ years old. Some seniors are still physically capable, but have decided retirement should free them from the mundane chores of adult life. The “active adult” lifestyle afforded by 55+ communities often is the perfect solution.

Imagine suddenly deciding on a romantic weekend out of town and being able to leave immediately. You’re in a secure environment–no need to make special arrangements. Maintenance tasks are all handled for you. You and the neighbors watch out for each other all the time, so just pack and go! That’s the real appeal to 55+ homes–they give you freedom.

In addition to the freedom, planned communities offer opportunities to spend time golfing, woodworking, sculpting etc., with peers who love the same things you do. It could be time in the gym, or lying by the pool. Whatever your favorite things are, there’s a 55+ complex out there to help you enjoy them.

There are trade-offs. Typically a down-sizing senior goes from three or more bedrooms, in 2500+ square feet, to a two bedroom unit with less than 1200 square feet. That means a lot of furnishings, knick-knacks and memorabilia get sorted and distributed. It’s work, but handled appropriately can be a valuable experience in turning the familial reins over to the upcoming generation. Writing these words, I have a mental picture of the happiness when my wife gifts her grandmother’s jewelry to our granddaughter. It certainly outshines putting family heirlooms in a will to be routinely read out with no hugs and tears of joy.

Senior Renters Face a Shortage

Seniors who own their homes have the option of modifying their homes or selling and downsizing. But senior renters, living on a fixed income, are much more vulnerable to the rent increases that are occurring more frequently across California.

In a growing trend across the nation, investors have been buying up rentals in bulk and raising the rent and/or sending eviction notices to senior tenants. (See article in the Los Angeles Times.) Tenants who try to fight the increases face lengthy and costly legal battles that don’t always turn out in their favor. The result?

In Los Angeles, 26% of no-fault evictions happen to residents who are 62 years or older. In contrast, roughly 13% of the city’s units are occupied by seniors. Thus, the eviction rate for seniors in Los Angeles is almost twice as large as it is for other age groups.

No-fault evictions usually occur when a renter is living with a month-to-month lease. Some seniors are unaware they have this type of lease, as when their annual lease ends the landlord may choose to continue the lease on a month-to-month basis. Then, when the landlord decides to re-list the unit at a higher rate, they may simply evict the long-term tenant with very little notice.

The number of homeless seniors is rising at an alarming rate. In Los Angeles, the number of homeless seniors rose 22% in 2018, leaving 4,800 seniors on the streets. Experts predict the number could rise to 30,000 by 2030.

Decisions, Decisions, Decisions

In summary, the three overarching choices for seniors considering a change in housing are: remain in the family home, sell and move to an active adult community, or try to secure stable rental housing. There are lots of variations on each theme. For example, one could rent out the family home to provide an income to cover the cost of a senior rental property.

Regardless of the route you take, the California Department of Aging offers a good deal of assistance for seniors facing housing changes. That department provides more detail about the types of senior housing and assistance here.

For those of you who are considering making a change in where you live, we would be happy to sit with you and find answers for any questions you may have.

Yes! Staging Works!

This summer I saw an amazing example of how effective staging a vacant home can be. If you’re debating the merits of staging your property, whether currently on the market or still in planning, consider this example.

The property in question had been listed for lease in February at $3800 per month. It languished on the market for six months, dropping in price to $3650 in the meantime.

In August the seller listed with a different agent asking $3900 per month. It leased for $3750 in less than 30 days!

After sitting vacant for six months, at a loss of $22,500, what changed? Besides the new agent, the whole look of the property changed! The new listing agent brought in a professional stager, who added furniture, and hired a top-rated photographer who showcased the new decorating gorgeously.

The cost? At over $1000, was it steep, or cheap?. Compare that to the $22,500 lost while seeking a tenant and it comes out looking like a bargain.

This is only one example, and could easily be an anomaly. However, having watched this process repeat over and over, I’m firmly convinced that the cost of a highly professional stager, photographer and broker will be vastly offset by the increased purchase price and/or the rapidity of the sale.

After all, would you rather sell in 30 days, or six months? And would you prefer more money, or less?

Who you hire as your agent really does matter!

Photo by Sidekix Media on Unsplash

Bœuf a la Bourguignon

First, how does one pronounce that impossible looking name? “Bœuf,” French for “beef,” sounds like a cross between “bif” and “buff.” Say it quickly and you’ll be close enough. “Bourguignon” is bu̇r-gēn-ˈyȯn. Just remember that the letters “g-n” are pronounced in French as though they were “n-y.”

But, you don’t need to pronounce it to love it. This is the dish Julia Child described as”…certainly one of the most delicious beef dishes concocted by man.” This version is considerably simpler than that in Julia’s landmark book, “Mastering the Art of French Cooking.”

Remember to use a good wine—a bad wine doesn’t improve with cooking.

This recipe can be adapted for a slow-cooker. Before loading up the pot, be sure to brown the ingredients as noted here. All ingredients can be added at the beginning except the mushrooms, which should be added at the end.

Ingredients

  • 3 tablespoons olive oil
  • 3 pounds boneless beef rump roast, cut into 1-inch pieces
  • 12 ounces button mushrooms (trimmed), halved or quartered if large
  • Coarse salt and ground pepper
  • 5 strips bacon, cut into 1/2-inch pieces
  • 1 white onion, coarsely chopped
  • 1 tablespoon tomato paste
  • 2 tablespoons all-purpose flour
  • 3 cups dry red wine
  • 2 cups beef stock
  • 2 bay leaves
  • 4 garlic cloves, smashed and peeled
  • 4 carrots, peeled and cut into 1-inch pieces
  • 10 ounces pearl onions, peeled
  • 1 tablespoon butter, cut into pieces
  • 2 tablespoons fresh parsley, chopped (optional)

Process

  1. Preheat oven to 350 degrees.
  2. In a large Dutch oven or oven-safe pot with a tight fitting lid, heat 2 tablespoons oil over medium-high. Add mushrooms and pearl onions. Cook until browned, about 10 minutes, then set aside.
  3. Season beef generously with salt and pepper and add to pot. In batches, brown beef on all sides, 2 to 3 minutes per batch (adding up to 1 tablespoon oil per batch, if needed); transfer to plate.
  4. Pour off all but 1 tablespoon fat from pot. Add bacon and chopped onion. Cook over medium heat until brown, about 5 minutes.
  5. Add tomato paste; cook, stirring, for about 30 seconds.
  6. Add flour and cook, stirring, 30 seconds.
  7. Return beef to pot; add wine, broth, bay leaf, and garlic. Bring to a boil, cover, and transfer pot to oven; cook 1 1/2 hours.
  8. Add carrots and cook until meat is very tender, 1 to 1 1/2 hours more, adding mushrooms 15 minutes before end of cooking.
  9. Stir butter into stew and serve topped with parsley.

Serve spooned over noodles, rice or mashed potatoes, or even a baguette.

Adapted from Martha Stewart’ version of Julia Child’s quintessential recipe. Wine photo by Lefteris kallergis on Unsplash. Food photo by unknown.