Category: Home value

Posted on

Inflation: Panic Prices and Real Estate

Pandemic price increases abound on Amazon.com, according to Financial Times.

Essential items see sustained significant price increases on Amazon in 2021, with some products jumping up many times their original price. Analysis by the US Public Interest Research Group studied 750 essential items sold on Amazon’s marketplace, comparing their pre-panic prices to what customers paid for them at the end of 2020.

Of 750 items, the prices of 409 increased by more than 20%, while 136 had more than doubled. Patio heaters, suddenly a must-have during winter lockdowns, saw the most significant percentage increase. One model skyrocketed from $150 to $699 — a 366% jump. | Blog Video

Home Prices Plateau

Despite massive federal spending, money printing and quantitative easing, some experts expect home prices to see a smaller rise this year than in 2020.

Southern California home prices and sales rose in December from a year earlier, continuing a so-called “pandemic housing boom” driven by rock-bottom mortgage rates and people needing more space to cope with lockdown.

The 6-county region’s median sales price jumped 10.1% from December 2019 to $600,000 last month, according to data released Friday from real estate firm DQNews. Sales rose 29% from a year earlier.

Real estate agents and other housing experts say the pandemic had supercharged the market. People with higher incomes who are most likely to buy a home in the first place have been relatively unscathed by the economic downturn. And some are looking for more space as some workplaces remain closed. Mortgage interest rates dropped to record lows, in part because of a Federal Reserve policy designed to stimulate the economy. Government -controlled mortgage company Freddie Mac reported the average rate for a 30-year fixed mortgage was 2.77% this week, down from 3.6% a year earlier. The drop has lured more buyers into a market in which they’ve found few homes for sale, prompting bidding wars on the most attractive homes.

Like gold, stocks and bitcoin, real estate provides a hedge against inflation. In Los Angeles County, the median price rose 11.4% from a year earlier to $700,000, while sales climbed 26%. 

The upswing in the for-sale market is in stark contrast to the rental market, where struggling tenants have disproportionately been hit by job losses. The contrast shows how the coronavirus panic has exacerbated economic disparities in California, and in the U.S. at large.

Many low-income renters are behind on rent and worry they’ll eventually face eviction during a pandemic that has killed more than 400,000 Americans. The average rent in Los Angeles has also fallen as vacancies rise, in part because some higher-income renters are choosing to buy for the first time.

Stagflation, the collapsing economy with higher prices, best explains the crazy combination of up, down and stagnant prices. While it is true that some suburban neighorbhood prices went up in 2020 because families and office workers were locked down, forced to stay home more, the prices increases reflect a temporary need for more suburban style safety and more square footage due to temporary overuse of residences, not because of a long-term increase in value. Based on true accounts from actual real estate professionals in Los Angles, reports of a “pandemic real estate boom” are as overblown as other pro-pandemic propaganda that we are being forced fed by politicians and biased media. Most home values are stagnating or falling nationwide. Most urban home prices have been tumbling for several years. Commercial real estate has fallen off a cliff, as investors like Ben Mallah sell loser hotels in favor of safer properties anchored by major national brands.

Shorting oil is the money-making play as a new presidential administration confirms plans to reduce oil demand considerably by extending lockdowns and increasing regulations.

Get a free list of the best real estate investments in Los Angeles. Fill out the online form:

Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Realty Source Inc, BRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

Posted on

California Property Market and Home Prices: Why We Can’t Believe Real Estate Agents

REAL ESTATE NEWS

This Just In — Just got a market prediction from a helpful real estate professional who has supplied useful information to the L.A. Loft Blog over the years. Let’s take a look at what they say, and what points they got wrong: #realestate #market #homeprice

The macroeconomic data is encouraging, as businesses report stronger results and increased optimism. The labor markets continue to heal as well, albeit at a slower pace. Buyers remain enthusiastic, and low rates, which are expected to persist over the near term, are at the root of that trend. There are, however, some signs of a recovery that is gradually subsiding to a more muted pace after an initial resurgence.

Expect More Home Sales and High Prices in 2021: The California Association of Realtors expects sales to continue to improve for the remainder of 2020, and to increase modestly again next year. Buyer demand remains robust, and that has already pushed California’s median price above $700,000. Inventory, however, is expected to remain a challenge that will keep sales growth in the single digits next year.

Fewer Mortgages Now in Forbearance: After more than 4 million households applied for forbearance here in California during the virus panic, those numbers have gradually begun to improve with about 1 million fewer households skipping payments.

More Encouraging Macro Data Last Week: Business optimism increased, inflation eased (so the Fed will be encouraged to continue to accommodate), and interest rates are back to all-time low levels of just 2.87% last week, according to Freddie Mac. Unsurprisingly, buyer demand remains robust in this low-rate environment and California’s weekly showings index is currently 182.3% ahead of the same point in 2019, and mortgage purchase applications were up 24.2% on an annual basis last week.

Weekly Market Data Slowing: After remaining unseasonably strong through September, closed transactions finally began to dip last week. We saw a 18.7% drop here in Southern California. New listings and pending sales were also trending down last week. We typically see a big decline in the fall months, so this is not unexpected.

Serious Delinquencies Rising in California: Despite the relative strength of housing and the recent improvements in forbearance numbers, the number of serious delinquencies and potential foreclosures in California remains a risk over the medium term. According to recent data from the Mortgage Bankers Association, 6.83% of California’s residential mortgages were delinquent by 30 days or more. Foreclosure starts remain minimal due to current moratoria, and many of these homeowners may get current, sell their homes, or otherwise avoid foreclosure. The numbers translate into more than 350,000 homeowners behind on payments here in California.

These numbers are fairly accurate for the suburbs at the moment, but they are not helpful for ailing Downtown Los Angeles, which has seen a significant drop in home values over the last two years. Most suburban single family homes are doing well, but Irvine, along with other areas affected by the pullback of capital from China, have dropped in price for the last two years.

Real estate agents and politicians usually paint overly rosy pictures of their own terms, accomplishments and local real estate market prospects. Zillow says that the typical home in the US is expected to appreciate about 7% in the next year, but homes in these cities are largely expected to appreciate at a lower rate, according to Business Insider. The urban real estate market continues to plummet. As the Loft Blog correctly warned at the beginning of the month, October proved to be a crashy month for the stock market and urban real estate. For DTLA, this decline shall likely continue for at least another year or two. If the public and their elected politicians continue to make bad economic decisions based on fear, panic and hysteria, the U.S. could see long-term stagnation like Europe, and possibly a lost decade, just like Japan already experienced.

The most common fraud perpetuated by real estate agents is overstatement of expected selling price. We’ve seen a recent increase in this behavior, and we expect to see further jumps in fraud and deceit as the economy encounters growing troubles.

Find out what your home is worth in today’s market

Get a free list of recent homes sales, along with homes currently listed for sale. Fill out the online form.

LOFT & CONDO LISTINGS DOWNTOWN LA [MAP]

  Lofts For Sale     Map Homes For Sale Los Angeles

SEARCH LOFTS FOR SALE Affordable | Popular | Luxury
Browse by   Building   |   Neighborhood   |   Size   |   Bedrooms   |   Pets   |   Parking

Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Realty Source Inc, BRE 01889449, MPR Funding Inc NMLS 2000513. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LAcondoInfo.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.