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Sales Volume Shaky, Prices Falling

South Bay Prices Falling

The real estate market in the Los Angeles South Bay kicked off 2025 with an 11% increase in the number of residences sold for January. That increase in sales volume was accompanied by median price bumps that ranged from 0% in the Inland area to 32% in the Beach cities.

Fast forward to May, almost halfway through the year, and the sales volume has dropped to a 7% increase over May of last year. With the number of homes selling declining, the median prices have likewise moved from the positive side to the negative. Comparing the median prices to May of last year shows prices falling in three of the four South Bay areas. Only the Beach cities managed to stay positive with a 9% increase, albeit compared to 32% in January. The other three areas dropped by as much as 8%. (See below for more detail.)

This South Bay Market Snapshot shows where the market is shifting and by how much. It’s designed to help clients understand the direction of the market. Those who watch the market trend will see increasing larger chunks of real estate market are sliding toward recession either in the number of homes sold for a given period, or correspondingly dropping in median price. The mid-year report next month should provide a more definitive comment on the future of local real estate.

Beach: Still Up, but …?

May was not a good month for real estate in the Beach cities, but it was better than last May. The month over month statistics are red ink, with the number of homes sold dropping by 2% and the median price falling 3% from April. Sales volume came in at 122 units, compared to 125 in April. The median price was $1,900,000 down from $1,955,000 last month.

Annual sales volume was more impressive at 11% increase in the number of homes sold. Similarly, the median price at the Beach escalated by a relatively high 9%, compared to the other areas of the South Bay.

Year to date, 541 homes have sold in the Beach area, 25% greater than the first five months of 2024. At $2,000,000 the median price surprises, since the median month to month is only $1,900,000. How could the median for the year to date, be higher? Well, looking at the past few months shows Beach area prices started the year much higher than they are now. In fact, the median in January was $2,355,000—almost $400,000 higher than May. Beach area median prices have been falling every month this year.

Harbor: Sales Slipping, Prices Down

Month over month, sales volume in the Harbor area dropped by 5%, from 310 homes in April to 293 in May. Surprisingly, the median price climbed from $785,000 to $815,000, for a boost of 4%.

Comparing this May to the same month last year gives similarly mixed results, though in reverse. While monthly home sales found May lower than April, annual sales were up 2% from May of 2024. In the same time frame, median prices fell 4% across the year.

For January through May of 2025 the number of home sold rose 6% from last year, for a total of 1373 properties closing escrow. During the same period of time the median price rose 1%, ending at $785,000.

Hill: Sales Solid, Prices Down

Home sales on the Palos Verdes Peninsula for the month of May delivered an increase of 1%, totaling 74 homes. In May, the median price likewise went up, reaching $1,850,000, or 4% more than those sold in April.

Looking at sales volume year over year shows a more varied picture. Last month compared to May of 2024 offers a 12% increase in the number of homes sold. At the same time, the median price tumbled by 5%. One should always be cautioned that with the small number of transactions in peninsula homes, percentages often seem exaggerated, thus it’s important to look at the year to date statistics, too.

For the first five months of 2025 275 homes were sold on the Hill, boosting sales volume by 7% over that of 2024. While the volume came up, the median price went down. At $1,897,000 the median dropped by 2%. It would seem a correction was in the making, though that’s based on memory of other financial “compressions” in recent years.

Inland: Median Prices Continue Down

Monthly sales statistics brought a 12% jump in homes sold in the Inland area. This increase is easily the steepest in the South Bay for May. The next closest rise in sales was the Palos Verdes area with a 1% bump over April volume. The 143 homes sold at a median price of $870,000, a 1% drop from the April median.

The Inland area joined the Hill in yearly sales increases. Both areas registered a 12% jump in volume, coming in at the top, with the South Bay as a whole rising by only 7%. Continuing a trend started in March, Inland median prices once again fell, this time registering the steepest drop across the South Bay, falling 8% below last year’s May numbers.

As the calendar barrels toward mid-year Inland sales volume for the year to date has climbed 5% over 2024 to 575 homes sold. Median prices for the same period rose a very modest $10, settling at $900,000, effectively a 0% increase.

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

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What Is A Promissory Note?

A promissory note is a legal document that will be created if there is a loan being obtained as part of the purchase of real property. The written note is designed to enforce a borrower’s promise to pay back a lender. The payor agrees to pay a certain amount of money to a payee in the future on a specified date. The note must spell out the name of the payor and the payee, and it must be signed by the payor.

It does not have to be notarized, but to be enforceable, a promissory note must contain an unconditional promise to pay a sum of money under specified terms and conditions of repayment. The note must also include an absolute date for payment. A concise promissory note will also include an interest rate and describe the collateral being used to secure the note.

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What Is A Breach Of Covenant?

A covenant is a binding contractual agreement between two parties to do or not to do a specified act. Covenants are usually enforceable by the courts if they are reasonable, clear, definite and lawful.

A breach of covenant is the failure to obey a previously agreed-upon legal arrangement that was created honestly and in good faith. When one party to a contract refuses to uphold their obligation as spelled out in that covenant, that party is in breach.

In real estate, a breach of covenant most often occurs when a buyer or seller backs out of a contract to buy or sell a home. A breach can also occur when either individual fails to perform any of the terms of a purchase contract. Breaching a contract should be taken seriously. The party who has suffered from the breach usually has recourse in a court of law, where the legal remedy could result in monetary damages being awarded.

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Why Is California So Much More Expensive Than Most Of The US?

California has always been an expensive place to live, and it’s only getting more and more expensive. The median home price is about 2.5 times higher than the national average, and 11 times the median income. Of course, prices are trending upwards across the nation. Appreciation over time is normal, and has accelerated in the wake of the 2020 pandemic. But these things affect everyone — so why is California specifically so much more expensive?

It’s not just as simple as having higher desirability, although that is certainly the case. The primary issue is a lack of affordable housing. There are multiple reasons for this. California may be the third largest state by area, but it also has the highest population of any state. It’s not among the densest, but it is rather sprawling. There’s just not a lot of open land to build on, particularly land that fits all the various zoning restrictions that are in dire need of updating. However, updating zoning laws is getting pushback from residents. Construction costs are also up. While construction companies typically would rather build multifamily residences, they have to build what’s in demand — which is mainly single-family residences.

In addition, because purchasing a home is so expensive, landlords are better served continuing to rent out their homes and units rather than attempting to sell, even though selling would decrease home prices. This is exacerbated by property tax laws in California. Prop 13 limits the rate at which property taxes can increase until a property exchanges ownership. Therefore, people who have owned a home for a long time can pay very little in property taxes, reducing the likelihood of any sort of market activity.

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More: https://calmatters.org/explainers/housing-costs-high-california/

New California Law Reduces Security Deposits

Much of the consideration for renting over buying comes from the lower initial cost. However, with quickly rising rents and increasing access to financial assistance especially for first-time homebuyers, that gap is closing somewhat. AB 12, which went into effect at the beginning of July, seeks to lessen the upfront cost burden on renters.

Under AB 12, no landlord can charge a security deposit greater than two months’ rent, and in some cases, it’s limited to one month’s rent. The one month limit applies to landlords who own either more than two rental properties or more than four units, as well as when the tenant is a military service member. In all other cases, the limit is two months. Unlike prior law, whether the unit is furnished or not is not taken into account.

What remains to be seen is how easily this law can be enforced, particularly whether landlords adhere to the one month or two month limit. Previously, the difference was whether the unit was furnished or not, something that could be easily confirmed or denied. However, landlords are under no obligation to reveal to tenants how many properties or units they own in total. Moreover, since a landlord can refer to either a person or a limited liability corporation, it’s possible to put properties managed by the same landlord under different names. There may be protections in place for tenants who discover a landlord attempting to sneak by this rule, but they may have a hard time proving it.

More: https://www.ocregister.com/2024/07/01/rental-security-deposits-in-california-cut-substantially-under-new-law/

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What Is A Buyer Agency Agreement?

When a buyer and an agent enter into an agreement for the agent to represent the buyer in the purchase of a home, that agreement is called a buyer agency agreement. If the agent is not performing per the agreement, the buyer may cancel the agreement by providing written notice to the agent. It is important for the buyer to make sure the right conditions are outlined in the agreement. A buyer agency agreement usually spells out the duties the agent has towards the buyer in finding and closing on a home. The buyer can participate in negotiating the terms of the agreement.

Buyer agency agreements have typical term lengths of 90 days but can be negotiated for any length. A buyer can specify the kind of property being sought so the agent keeps on track during their search. The terms of the agent responsibilities should also include negotiating on behalf of the buyer and making sure the sales transaction successfully closes.

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Understanding Prepayment Penalties

There’s a strong tendency to want to pay off your mortgage as quickly as possible. There’s also a strong reason for lenders to not want you to do that — they get less money because you aren’t paying as much in interest. Because of this, they frequently use prepayment penalties. This is an extra fee for paying off your mortgage too quickly or before the term of the loan ends. If you’re simply paying the minimum amount anyway, this won’t affect you, but if you think you may want to pay off your loan early, you’ll want to know your options.

Different states have different laws regarding prepayment penalties, and some don’t allow them at all. In states where they are allowed, they come in two types: hard prepayment penalties, which are fixed fees regardless of the reason for prepayment and that are usually a percentage of the loan amount, and soft prepayment penalties, which are only charged if the borrower pays a large amount in a short time period. Even in states that allow prepayment penalties, not all loans will have them, and you may be able to negotiate with your lender for their removal. When shopping for loans, make sure to read all the terms of the agreement, and talk to a legal professional if there’s anything you don’t understand or want to learn how to negotiate.

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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.

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Local General Plan To Gain Priority Over Zoning Laws

Every city in California is required to present a general plan for housing development, which is to be updated each year. The general plan must take into account housing needs based on the population and expected population growth. However, what the general plan doesn’t account for is zoning laws, which currently take precedence over the general plan. This means cities can feign considerations in their general plan while implementing zoning laws that combat their own plan. Even cities that mean well may not be able to get sufficient votes to modify their zoning laws in accordance with the general plan.

That will change beginning January 1, 2024. Under AB 821, development plans that don’t meet zoning ordinances may still pass if the ordinance they fail to meet is inconsistent with the general plan. AB 821 allows for two possible outcomes in this scenario. The local agency controlling development applications has 180 days to either amend the zoning law that is inconsistent with the general plan, or simply process the development application regardless of failure to meet zoning laws. Note that this law doesn’t actually force changes in zoning ordinances. Nothing happens to zoning ordinances that aren’t challenged by a development application designed to further the general plan, and a very stubborn local agency could simply delay processing by up to 180 days, and then possibly a further 90 days in court.

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More: https://journal.firsttuesday.us/new-law-prioritizes-local-general-plan-over-zoning-ordinances/92901/

Tenants To Get More Protections In April 2024

The Tenant Protection Act (TPA) was originally passed in 2019, and outlines the conditions under which a landlord can legally evict a tenant. The TPA has been revised and updated in the past, and is receiving a new update with the passage of bill SB 567. The new law goes into effect April 2024, and adjusts the requirements for no-fault evictions, as well as setting the fine for a landlord’s violation of the laws at three times the cost to the tenant plus additional fines.

Under current regulations, a landlord can perform a no-fault just cause eviction if the landlord or their immediate family intends to occupy the residence, or the landlord intends to demolish or substantially renovate the residence. Under SB 567, mere intent isn’t enough. Rather than only planning to occupy the residence, the landlord or relative must have already occupied it for at least 12 continuous months as their primary residence. Demolition or renovation plans require a written notice including permits, a description of the plans, and an expected duration, as well as the opportunity for the tenant to re-rent the property at the same price if the plans don’t go through. There are other conditions under which a landlord can perform a no-fault just cause eviction, but they aren’t affected by SB 567.

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More: https://journal.firsttuesday.us/updates-to-the-tenant-protection-act-tpa-tighten-loopholes-and-up-enforcement/92495/

California Awards Over $350 Million In Grants For Housing Development

The Regional Early Action Planning (REAP) 2.0 program was enacted in 2021 in order to achieve housing and climate goals, including infill development and appropriately priced housing. REAP 2.0 received its first round of funding in July of this year, and has decided where to allocate its grants. Over $352 million was awarded in grants.

Of this amount, $30 million was given to Higher Impact Transformative (HIT) communities. HIT communities are those that have demonstrated a commitment to underserved communities. For this round of funding, that includes the City of Oakland, the City of Rancho Cordova, Tahoe Regional Planning Agency (TRPA), San Diego Association of Governments (SANDAG), and Bay Area Rapid Transit (BART).

The majority of the funding went to Metropolitan Planning Organizations (MPOs), some of which also serve HIT communities. TRPA and SANDAG received funding in both categories. Most of the funding going to MPOs was awarded to the Southern California Association of Governments (SCAG) at $237.41 million. The other MPOs that received funding were Association of Monterey Bay Area Governments (AMBAG), Madera County Transportation Commission (MCTC), Sacramento Area Council of Governments (SACOG), and Shasta Regional Transportation Agency.

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More: https://journal.firsttuesday.us/hcd-awards-grants-to-increase-access-to-housing/91622/

Aid For Marginalized Homebuyers Coming At A Bad Time

Representative Maxine Waters recently introduced the Downpayment Toward Equity Act of 2023, intended to help disadvantaged groups afford their first home. The bill would provide financial assistance for down payments, closing costs, and the costs to reduce interest rates for first-generation homebuyers who have not bought a home within the past three years. This mainly affects Black and Latine communities and could benefit up to around 5 million prospective homebuyers. However, while probably good-intentioned, this effort is not without its flaws.

We’re currently coming out of a historic peak in home prices. Prices have started to fall now, but they’re not going to suddenly bottom out overnight. It’s going to take a while for home values to fall. Pushing homeownership aid now is not the right time, for anyone, even if it’s directed at helping disadvantaged groups. And the last time minorities experienced a surge in homeownership turned out terrible for them in the end, albeit under different circumstances. In that case, it was predatory subprime lending that left minorities on the hook for massive mortgages with negative equity after the subsequent economic collapse. Of course, it’s doubtful that Waters’ intentions are predatory, but her plan could perhaps be better timed around the state of the economy.

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More: https://journal.firsttuesday.us/close-the-racial-homeownership-gap-but-not-in-2023/

Rent Control Expansion Once Again On Ballot

In this November’s election, the Justice for Renters Act will reach the ballot. This bill would repeal the Costa-Hawkins Rental Housing Act, which is a 1995 state law that prohibits rent control for certain properties. Repealing it would allow local city governments more freedom in making decisions on rent control. This isn’t the first attempt — similar bills were put on the ballot in 2018 and 2020, but neither passed.

That doesn’t necessarily indicate a lack of support, though. What has actually happened in the past is that those who benefit from a lack of rent control are both more vocal and wealthier. Of course, it should come as no surprise that landlords are typically wealthier than those renting from them, and therefore able to contribute more campaign funds. But you may not be aware that renters are less likely to vote, particularly because non-citizens are more likely to rent than buy. In addition, the share of renters in California is slightly smaller than the share of homeowners. Even if homeowners also includes non-landlords, homeowners generally aren’t negatively impacted by high rent prices. This time, though, rent prices have become so exorbitant that the bill has a higher chance of passing this year.

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More: https://calmatters.org/newsletters/whatmatters/2023/07/rent-control-ballot/

Another Federal Funds Rate Increase Expected This Fall

Last week, the Federal Reserve, commonly known as the Fed, increased the federal funds rate by 0.25 points. The federal funds rate now sits at 5.25%-5.5%, the largest value in 22 years. In addition, the Fed made a statement regarding “determining the extent of additional policy firming that will be appropriate.” Policy firming refers to rate increases.

Barclays, a multinational bank based out of the UK, also noted a change in the Fed’s language regarding this policy. A prior statement by the Fed referenced “the extent to which additional policy firming may be appropriate.” Their new statement is significantly more certain about the appropriateness of additional policy firming, leading Barclays to believe that the Fed plans additional rate increases. Barclays predicts this will probably happen in September or November, which are the next two times the Fed meets.

However, it’s important to realize that the federal funds rate is not the same as mortgage interest rates. In fact, they aren’t directly related at all. Mortgage interest rates do frequently increase when the federal funds rate increases, but there are additional factors at play. These include demand and economic outlook. Both of these are somewhat mixed. Demand is not particularly high, but neither is supply. Our economy is currently in a recovery cycle, so it’s looking up, but isn’t necessarily stable. So, it’s definitely a possibility that interest rates increase some more, but not a guarantee.

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More: https://www.usatoday.com/story/money/2023/07/26/fed-interest-rate-hike-live-updates/70463418007/

Homeowners Now Eligible For Tax Credits For Energy Improvements

Starting from the beginning of 2023, and going until 2032, the federal government has announced tax credits for improving the energy efficiency of one’s home. Some of the credits apply only to primary residences; others apply to both primary residences and second homes. In either case, a tax credit of 30% of the cost of improvements can be applied to federal income tax.

The energy improvements that apply to either type of residence are rooftop solar panels, wind energy improvements, geothermal heat bumps, and battery storage. The types of improvements that apply only to primary residences, as long as they are energy efficient varieties, are heat pumps, heat pump water heaters, insulation, doors, windows, and electrical panel upgrades. This tax credit also applies to home energy audits. The primary residence only tax credit has a limit of $3200 annually.

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More: https://journal.firsttuesday.us/energy-efficient-tax-credits-for-housing/91323/

Understanding The Escrow Process

If you’ve ever bought a home, chances are you’ve heard of a property being “in escrow.” But what does this actually mean? Escrow is the term for a neutral third party holding funds and documents to be disbursed during a real estate transaction. This is typically either an escrow officer or a title company, and even if it’s a company, the entity will be referred to as the escrow officer. The reason for this is to safeguard funds to avoid misallocation or fraud, which is why it’s important that the escrow officer is trusted by all parties involved.

The escrow process is initiated when the buyer and seller open an escrow account and deposit the funds after agreeing on the terms of the transaction. This is also when the buyer deposits their earnest money and the escrow officer collects all necessary documents, such as the purchase agreement, title documents, and loan documents, among others. Once escrow is initiated, the buyer will then have a period to investigate the property and conduct inspections. If the buyer finds any issues during this period, that’s when they can request repairs or renegotiate the agreement. Once the buyer is satisfied, the next step is to remove contingencies, after which the transaction enters the closing process. During the closing process, the escrow officer prepares closing documents and coordinates signatures. Only after the documents are signed by all parties can the funds be disbursed and title transferred to the buyer.

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FAQs For Living Trusts

It’s common nowadays, though not necessary, to use living trusts to hold real property. It’s also a common misconception that the trust owns the property. Trusts are complex, and contrary to what one may think, don’t actually get any simpler when there’s only one trustee. A trust is always an agreement between a trustor and a trustee. This doesn’t change even if they’re the same person, which is definitely possible, but you still need to know the difference.

The trustor is the person who creates and funds a trust, and sets the terms, beneficiaries, and trustees. The trustor is usually only one person, but could be a married couple. The trustor could also be a trustee, and often is when the trust is created, but may not be. Trustees, on the other hand, manage the trust and perform day-to-day tasks in accordance with the directions given in the trust. There could be any number of trustees. These are the actual owners of real property, not the trust itself. If at any point all trustees are deceased or unwilling to act, the trustor can appoint a new trustee, or the court can do so if the trustor is not able to or not allowed to by the trust’s provisions.

Trustees are also responsible for signing the certificate of trust that would be provided to the title insurance company. This document must have the date of the trust’s creation, identity of all trustors and trustees and whoever can revoke the trust, powers of the trustees, manner in which trust assets are taken, legal description of the property or whatever part is held by the trust, signatures of trustees, and a statement that the trust certification is still valid and correct. Normally, all trustees must sign, but there could be provisions in a trust that allow for less than all of them to sign. Trustees may give someone power of attorney only if the trust specifically allows for it.

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Blanket Bans On Tenants With Criminal History Are Illegal

California has a long list of protected classes under its fair housing laws. Landlords are forbidden from refusing tenants on the basis of being in a protected class. People with a criminal history, however, are not a protected class, and landlords are allowed to request a background check and base their decisions on it. So landlords may not be aware that it is illegal have a blanket ban on tenants with criminal history. Why is this the case, then? The answer is implicit discrimination.

It’s well known that racial minorities, particularly Blacks, are heavily disproportionately criminal record holders. Regardless of the reason for this fact, it’s true that blanket bans on criminal record holders do therefore disproportionately affect racial minorities. Because of this, California law prohibits these blanket bans. It is, of course, also illegal for landlords to only conduct background checks on members of specific protected classes, but this shouldn’t come as a surprise. In addition, landlords cannot reject tenants on the basis of suspected criminal activity without a criminal record, nor on the basis of gang affiliation. Despite the association of gang affiliation with probable criminal activity, it is not actually illegal to simply be a member of one.

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More: https://journal.firsttuesday.us/california-targets-unlawful-crime-free-housing-policies/90723/

Tax Implications Of Assisting Your Kids With Mortgage Payment

Some parents want to help their kids any way they can, including by helping them pay their mortgage. Or perhaps they’ve suggested that their inheritance be used for this purpose. Others want to instill the importance of financial responsibility or independence. Some simply can’t afford to help. But if you do want to help your kids with their mortgage, there is some important tax information you should be aware of.

One very common way for parents to assist their kids is with a financial gift. This isn’t just as simple as giving them money. Financial gifts above a certain amount per year do need to be recorded, and may be subject to a gift tax. In 2023, this amount is anything over $17,000 annually, but this value could change each year. Income tax could come into play if instead of gifting your child money, you provide them with a loan. The interest you receive on the loan must be reported as income and may be subject to income tax, and may also be deductible for your child. Capital gains tax is relevant if your kid inherits a property from you or you gift them a property. In the case of a gift, when your kid sells the home, they will need to pay capital gains tax if the home appreciated in value. In the case of inheritance, the capital gains tax amount is based only on the amount of appreciation and not the total value of the home.

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New FHFA Schedule Sparks Controversy

At the start of May, the Federal Housing Finance Agency (FHFA) modified the fee structure for loans guaranteed by Fannie Mae or Freddie Mac. The goal of the change was to increase the accessibility of homeownership to disadvantaged groups. In order to achieve this, fees were reduced for low-income borrowers, first-time homebuyers, and those with credit scores below 680.

However, reducing some fees meant needing to increase fees elsewhere. Fees increased significantly for middle income earners, those making larger down payments, cash-out refinance applicants, and second-home buyers. Critics argue this is a bad idea, since middle-income earners are more ready to buy and less risky to lend to. But despite the fee increases for middle-income earners, fees are still lower the higher your credit score — that hasn’t changed. If the changes push middle-income earners away, the effect is probably psychological, not necessarily financial.

Photo by Gabriel Meinert on Unsplash

More: https://money.com/fannie-mae-freddie-mac-new-mortgage-fee/