Assembly Bill 851 is a new law that requires written attestation that a home sale was not due to an unsolicited purchase offer. It went into effect November 10, 2025, and will remain in effect until January 1, 2027. The law applies to select ZIP codes within Los Angeles County and Ventura County. The affected ZIP codes are 90049,90263, 90265, 90272, 90290, 90402, 91001, 91024, 91103, 91104, 91106, 91107, 91301, and 91302 in Los Angeles County, as well as 91320 in Ventura County.
The goal of this bill is to reduce predatory purchasing in areas affected by the recent wildfires. However, it applies to all sales in these ZIP codes, regardless of whether the seller was affected by the wildfires or not. Under AB 851, an unsolicited purchase offer refers to any offer made without public indication that the owner is willing to sell. Public indication can be a listing with an agent, a For Sale By Owner sign, or a public online posting. Both the buyer and the seller must sign the attestation, and it must be attached to the grant deed.
In July the South Bay real estate market made a valiant attempt to maintain a positive stance. It failed. Compared to June of this year, things looked better on the sales volume side, but June was already in the tank, so even the summer bump was only modest help. Looking back to July of last year gave a depressing picture. Overall sales for the south Bay were off by 1%. In itself that’s not a huge number, but considering the market started this year at well over 10%, it’s a big drop in sales.
Median price was an even greater disappointment. In January every area of the South Bay was in positive numbers. By July, every area except PV (which has been negative four out of seven months), was shrinking.
Year to date numbers have overall pointed in an equally negative direction. For the first seven months of the year the South Bay is looking at a 6% increase in homes sold. Compared to the 11% that started the year, one has to conclude the local real estate economy is trending down. The median price tells an even more down-trodden perspective with nearly all areas showing prices falling by 1% to 3% from the same period in 2024.
Beach: A One Month Jump?
The number of homes sold in the Beach cities during July jumped to 130 units, up 11% from June sales. Keep in mind, the increase follows a 4% drop in June, which followed a 2% drop in May. Month to month sales have been erratic at the Beach, while annual sales volume has been steeply up compared to 2024. July sales continued the trend with a 10% increase over the same month last year.
Median price is another matter. At the Beach the median came in at $1,844,000, down 3% from June. July was the sixth successive decline in month to month median prices for the Beach area. Annually the median has shown mixed results compared to 2024, ranging from a 32% increase in January to a 1% decline in July. This drop in July followed another 1% decline in June, continuing what looks like a year long slide in median price and in sales volume. While still higher than in 2024, July was the second lowest month this year in terms of homes sold.
Cumulative sales for 2025 were 23% higher than 2024, though still down 15% from 2019, the last normal year of business preceding the pandemic. For the same period, the median price is up 9% over last year, while coming in at 49% above the median in 2019.
Harbor: Volume and Median Down
July was not a positive month for the Harbor area. Compared to June, sales volume and median price both fell by 8%. The number of homes sold for the month fell to 307 units, while the median price dropped to $775,000. This was the steepest monthly drop seen at the Harbor in 2025.
Annual statistics weren’t any better. Looking back to July of 2024, shows sales volume declined by 3%, and the median price fell 9%, the largest annual drop this year. If the current trend continues for the balance of the year, Harbor area real estate may take a serious hit.
Year to date sales through July came in at 3%. While still positive, it’s important to note the Harbor started the year with sales volume at 10% and has been dropping all year. Similarly, the median price has gone from 1% up in January to 9% down in July, ending the first seven months falling by 1%.
A quick comparison to 2019, shows year to date sales volume still down 20% from pre-pandemic business. Median price is still 43% above the 2019 median.
Hill: Strikingly Good
The Palos Verdes Peninsula saw a strikingly good real estate market in July. Month over month sales climbed an astonishing 53%. Of course, it’s not so impressive when one notes that sales dropped 34% last month. Even at that, 75 homes were sold in July, well above the average sold in any month for 2024 and the highest number in yet this year. At $2,185,000, a 13% increase over June, the median price was likewise the highest month for 2025.
Though not as dramatic, the year over year statistics were also impressive with a 3% increase in the number of homes sold compared to July of 2024. Increasing at 8% over July of last year, made PV the only area with a positive median price this month.
Viewing 2025 versus 2024 year to date sales brought another increase of 2%, roughly on par with the rest of the South Bay. Then came the only negative on the Hill for July—a drop of 1% in the median price.
Year to date sales compared to 2019 are still down by 11% , while the median price remains up by 44% from 2019.
Inland: Long Term Slowdown
July versus June numbers showed surprising strength for the Inland area. Those cities kicked the sales volume by 15%, with the number of homes sold climbing to 131 units. While boosting the median price 1%, to $979,000, the Inland area topped the market except for the highly volatile PV peninsula.
The monthly trend reversed with the annual statistics. July 2025 compared to July 2024 showed a 8% drop in the number of sales, accompanied by a 2% drop in the median sales price.
Year to date for the first seven months came with mixed results. Sales volume showed a 1% increase. For the same period, the median price dropped 3%, ending very much like all areas except the Beach, which continued to show positive results.
Once again looking back to 2019, before the real estate market was irremediably shaken by the Covid pandemic, current sales are down 15% and median prices are up 36%. With five months left in the year and economic forecasts leaning toward stagflation, this could well be a tipping point.
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
Conventional wisdom dictates that large spaces that can be adapted to multiple functions, such as extra bedrooms, are the best way to draw a large variety of buyers. But if you know exactly what buyers are looking for, you don’t need a variety — just someone who’s very interested. And right now, what many buyers are interested in is a personal home library.
Obviously, a bedroom can be turned into a library. But for many people, that’s a waste of space, because they’re not going to use most of it. Buyers are wanting small, cozy spaces where they can relax with a good book or focus on a task without any distractions. If the space is too large, the homeowners might feel compelled to make it a multifunctional room in order to make the most of the space. This isn’t necessarily an issue, but would certainly make it difficult to concentrate.
An extra bedroom may still have more resale value in the end, but resale value doesn’t matter if you can’t get your home sold. There’s been a shift in priority towards homes that suit individual needs and can express personal aesthetics, so that buyers can feel comfortable in their new homes, rather than simply treating it as a roof over their head or cash in the future. This is especially true for high-end buyers, who can afford to be more picky about what they’re looking for.
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.
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.
Increasing house prices and relatively stagnant wages have led to the need to rethink our strategies regarding housing. Of course, solving the root issue would be preferable — but if that’s not an option, easing the burden is a useful venture. There have been several recent innovations in methods to approach affordable housing.
A couple of them have been around for a while, but not necessarily targeted at affordable housing. These are government subsidies and grants and developer incentives. If you give people money or tax breaks to build or buy affordable housing, it’s going to become easier. Another that you may have heard of is micro-housing. You may dream of a large home, but the truth of the matter is that smaller houses are not only cheaper, but also more cost effective to build. The only reason they weren’t being built before is lack of demand.
There are also some options you may not be aware of, though. These are community land trusts (CLTs) and shared equity models. CLTs attempt to reduce the cost of homeownership by separating land cost from building cost — normally, a house and the land it’s built on are purchased simultaneously, but with CLTs, the land is owned by a trust and only the structure is sold, so it costs less to buy. A shared equity model allows a buyer to purchase only a portion of the ownership of a home, with the share owned increasing as the buyer accrues equity and uses it to purchase a greater share. This is somewhat similar to a loan, but carries less risk, with the downside being that the buyer doesn’t have exclusive legal ownership of the property.
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.
In September, the share of homebuyers paying all cash was 34.1%. This is the highest it has been since the beginning of 2014, and an increase of 4.6% from September 2022. However, this doesn’t mean homes are more affordable; in fact, it’s the opposite.
While it’s true that a significantly higher share of buyers are paying all cash, there are much fewer sales overall. Total sales decreased by 23% over the past year. Compare this to a decrease of only 11% for all cash sales. Cash sales aren’t going up, rather sales overall are going down, and cash buyers are less affected.
The reason for this is high interest rates, since cash buyers don’t care what the interest rate is for a mortgage loan they aren’t getting. Interest rates fluctuate up and down on a daily basis, but rarely change by much at a time. But in this case, they hit a two decade high in September at 7.2 and then continued an upward trend into October, almost reaching 8%. As of last week, they had started to drop back down. Despite this decrease, with how erratic rates can be, that isn’t a sure sign that rates are now trending downward.
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.
The share of teachers able to afford homes near where they teach is dwindling rapidly. This year, teachers can afford only 12% of homes within 20 miles of their schools. This is a decrease from 17% last year. In 2019, before the pandemic, they could afford 30% of homes in their school’s area. Fortunately, there are options to help teachers.
The Department of Housing and Urban Development (HUD) is sponsoring a program called Good Neighbor Next Door, which sells homes in revitalized areas to certain government workers at half the listing price. This program is available to pre-K through 12 teachers as well as law enforcement officers and firefighters. Some of Fannie Mae’s programs, while not specifically aimed at teachers, have qualifications that teachers frequently are able to meet.
In addition to federal programs, there are also state and private programs to help teachers. California created the School Teacher and Employee program back in 2018. This specific program is discontinued, but is now folded into their MyHome program, opening it up to more people. The private program Homes for Heroes provides a 0.7% rebate on home purchases made through the organization’s specialists. It is available to firefighters, EMS, law enforcement, military, healthcare professionals, and teachers.
Home values have been increasing across the board in the US, and the percentage of homes valued at over $1 million seemed poised to hit a record in June of 2023, when the share reached 8.2%. That record wasn’t quite hit, as it actually belongs to the value of 8.6% in June of 2022.
The total value of the US housing market did hit an all-time record in June of 2023. The total was $46.8 trillion. For comparison, in June of 2022 — when the largest percentage were over $1 million — the total value was $46.6 trillion. This isn’t much lower, but it does show that either the top end is increasing in value, bringing the total value up, or there are more homes on the low end, bringing the share over $1 million down. Both of these are possibilities, since inventory is still low despite an increase in affordable living construction.
The traditional family unit in the US has historically been the nuclear family; that is, a household consisting of only parents and their non-adult children. While the reasons for this were initially economic, convention has popularized it as the socially correct thing to do. Recently, neither of these reasons hold water anymore. Thus, multigenerational households are increasing in popularity.
Both the Great Recession in the late 2000s and the lockdowns and recession following the Covid-19 pandemic resulted in adults, primarily young adults, moving back in with their parents. In many cases the young adults didn’t have children yet, but in some cases, they did. In this situation, the household would have three generations. The reasons for this shift were partly economic, but there are other benefits to multigenerational households. Having grandparents in the home makes childcare a lot simpler. Or if the elder generation can’t care for themselves, their children are right there to take care of them. Having multiple generations in a household can also improve the efficiency of household tasks, leaving more time for family bonding.
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.
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.
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.
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.
The space mission Huginn, planned for August 2023, will be a six-month long research stay at the International Space Station. One of the astronauts on the mission, Andreas Mogensen, wanted to bring some sort of snack from Earth to keep his energy up during long research hours. Mogensen decided to look to his friend Thorsten Schmidt, a Danish chef who had previously worked with him on another mission.
Schmidt’s solution was a new kind of chocolate bar. These bars, which he calls SPACECRAFTED, have a dark chocolate base and contain over 70 natural ingredients. Schmidt checked with a food chemist with over two decades of experience, Lisbeth Ankersen, as well as the European Food Safety Authority to make sure SPACECRAFTED is packed with nutrients. But you don’t need to be an astronaut to get these chocolate bars. They’ll be available on Earth starting mid-August, with three flavors to start and more to come.
The scientific consensus up until now has been that the universe has been in a constant state of expansion since the Big Bang. The reason for this belief was the phenomenon of redshift. Redshift is the stretching of light wavelengths as an object moves away from the viewer. Because more distant objects had higher redshift, scientists interpreted this as universal expansion. There have certainly been disagreements on the various details, but this general assumption has remained relatively constant. But one topic of disagreement — the cosmological constant — has led some scientists to look at the issue from a different perspective.
But what is the cosmological constant, and why is it so contentious? The cosmological constant is the term for the background energy of space. When originally conceived, Einstein thought this constant to be equal to zero. However, when scientists began to notice that the expansion of the universe — as measured by redshift — appeared to be accelerating, they needed an explanation. It turned out that their hypothesis could be explained by having a cosmological constant that is not zero, but a positive number. Unfortunately, while this solved one issue, it created others. More and more calculations started simply not lining up to observations.
Lucas Lombriser, a theoretical physicist at the University of Geneva, thinks Einstein was right about the cosmological constant being zero. Lombriser proposes an alternate explanation for changes in redshift. He suggests that the identity of the elusive dark matter is an axion field. An axion is a hypothetical particle that is already one of the strongest contenders for the true identity of dark matter. According to Lombriser, the specific properties of an axion field could account for both dark energy and changes in redshift, preventing the need for universal expansion as a cause of redshift changes, thereby solving the dark matter problem and the cosmological constant problem at the same time.
The high mortgage interest rates we’ve been experiencing have been the result of benchmark rate increases by the Federal Reserve. The benchmark rate isn’t directly tied to mortgage interest rates, but the benchmark rate does have a strong effect on interest rates. Now, though, no more rate hikes are expected, which should cause interest rates to level off, and then start to decline.
This levelling off followed by a decline is exactly what the Fed was aiming for with the rate hikes. It’s impossible for mortgage rates to drop without the real estate market, and in turn the economy as a whole, taking a hit. By raising rates above what they should be during a period of high prices, what the Fed has done is soften the blow by allowing the decline to be more gradual. Of course, this comes at the cost of significantly decreased affordability for the period of the rate hikes. Once interest rates fall below 6%, which should happen before the end of the year, the market should pick back up again. However, the effect may not be noticed until next year, as the end of the year is not generally a time of heavy market activity.
Builders have had it rough the past few years. The pandemic resulted in skyrocketing lumber prices as well as many job losses for construction workers. In order to get the most bang for their buck, builders started building luxury homes, which generally have a higher profit to cost ratio. But this couldn’t last long, as both market demand and legislation pressured them towards construction of affordable living homes, while at the same time, zoning restrictions made even this rather difficult.
Pressures on construction companies have started to ease up in most of the country, but not everywhere. Particularly in the West and Northwest, available land is an issue. Fortunately, builders may have figured it out and now have a new plan: Make smaller homes. It’s predicted that more affordable starter homes will become available within the next year or two, as 42% of builders are reducing the square footage of their homes. It doesn’t even require a big change — the nation’s largest homebuilder, D.R. Horton, is only reducing home sizes by an average of 2%. Builders are also planning to build more townhomes and duplexes, which take up significantly less space per unit than single-family residences.
