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Is the Los Angeles Real Estate Market a Good Place For Investment?

With the current economic instability, investing in real estate is touted as a great way to become wealthy. You can consider real estate investment in Los Angeles? Many real estate investors are asking themselves if buying a property in Los Angeles is a good investment? If you drill deeper into local trends you would understand the Los Angeles real estate market better. 

Buying the most expensive property on the Los Angeles real estate market would not help you earn any profit. You can perhaps look for an investment property in Los Angeles that you might move into or sell at retirement in the future. Either way, knowing your purpose and profit potential are the factors you should consider. 

Take a look at the positive aspect of the Los Angeles real estate market, which can help real estate investors who are keen to buy an investment property in LA. 

1. Los Angeles foreclosures could yield significant savings

Foreclosures are considered to be a great way to get hold of Los Angeles real estate at a bargain price. Foreclosure rates vary a lot. About 30% of homes in Topanga, Lake Hughes and Santa Fe Springs are in foreclosure. When one home is foreclosed with the bank, there is probably another home that is approaching that stage and is often sold at a discount by a distressed seller - who wants to avoid foreclosure. Such a distressed property could also be a good fix and flip option. Another option could be to buy the Los Angeles real estate at a low price and rent it out in a market starving for affordable rental units.

2. Appropriate Time To Invest in Los Angeles Real Estate

The Los Angeles housing market has been hot since the last recession. It hit record highs in 2019, but the market became sluggish due to the Coronavirus. Since 2018, prices have been declining. Currently, Los Angeles has transitioned into a balanced real estate market. The home prices are predicted to rise by only 0.7% this year due to the coronavirus pandemic.

3. Job Growth in Los Angeles

Los Angeles has an unemployment rate of around 4% surveyed on Feb 2o20. This data makes Los Angeles unique in the employment market. Many people are interested in working in Hollywood and hence they move to LA. Many are interested to work for a production company or in the fashion industry and hence they move to LA. As rent is too high here, people often share an apartment or single-family home with friends. Note that because of the ongoing pandemic, the unemployment rate in Los Angeles County increased over 19% in April 2020, from 6% in March 2020.

4. Good income from Los Angeles rental properties

A one-bedroom apartment rents for around $1400 - in the Los Angeles real estate market while a two-bedroom apartment for $1800. When you compare, these rental rates are nearly twice the national average. Whatever be the story, whether it is young Americans moving to LA or immigrants moving to Los Angeles - housing demand continues to grow. This explains the reason why rental rates on Los Angeles rental properties are going up every year.

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The Latest Trends in the Housing Market in Los Angeles

It is surprising to know that real estate property demand is strengthening, but on the other hand, new listings are relatively less in LA as the coronavirus outbreak takes a toll on the economy - as per the latest market data. Moreover, condos are getting hit the hardest. The strong demand for houses and tight inventory is pushing the prices higher in LA. Today, Los Angeles is home to around four million people.

Prices Are Showing Resilience

As per experts, the asking-price growth had stopped falling as compared to the previous week. Now, it has started increasing; the median asking price for listings of new homes was a bit more than $300,000 for the week starting April 13, up by 3% from the same period last year. Moreover, it may come as a surprise that prices aren’t down double-digits at present.

Demand Is Strengthening

Home-buying demand was seen to drop by 19% compared to the week before the coronavirus hit the country. The Los Angeles real estate market will slowly start to bounce back after the coronavirus impact shows a downward graph. The week-over-week stats show that the sales figures turned positive. The sales of both newly constructed and existing homes indeed tanked in March, as potential buyers dropped down and potential sellers pulled their homes from the market, both because of the uncertainty in the economy. But now suddenly, the buyer demand has started to climb back. Hence the Los Angeles real estate market has started to show an upward trend.

Speedy Sales Are on the Decline

It has been observed that houses are not snatched off the market within two weeks after it is listed. The behavior is seen to drop by 6% as compared to the first week of this month. Moreover, homes are seen sitting active on the market four days longer, as seen before the pandemic. 

Longer Time for Deals to Close

According to stats, a typical home was sold at the end of four weeks, ie it is now taking 28 days to close. It took 1.6 days less according to the same period a year ago. Most of the deals are being delayed as lenders are struggling with a huge number of refinancing applications. While other deals are getting postponed because borrowers are having trouble getting funding due to stricter lending requirements. 

New Listings Continue to Tank

The number of new-home listings last week was around 50k - which is down about 50% from a year ago. It has been observed that sellers tend to be holding off on listing their homes for sale. As a result, the housing market across the U.S. was started to show signs of weakening in light of the coronavirus pandemic. 

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Impact of COVID-19 on Los Angeles Housing Market

What will the Los Angeles Housing Market look like in the future?

Los Angeles is a famous walkable city in Los Angeles county, having a population of approx 3.7 million. The Los Angeles metropolitan area comprises five regions that include Los Angeles, Riverside, Orange, San Bernardino, and Ventura.  

Here is the latest monthly report of the Los Angeles Housing Market. Source: California Association of Realtors. The report compares key housing metrics of the Los Angeles area between the period April 2019 to April 2020. 

In the Los Angeles metro area, the median selling price of single-family homes rose by 2,5% to $550,000, while the sales dropped by about 30%.

As compared to March 2020,  in Los Angeles County, the median sold price decreased by 0.5%, while sales fell by 15.5%.

In Orange County, the selling price of single-family homes increased by 4% to $861,000, while sales were down 36%.

As compared to March 2020, the sale price in Orange County decreased by 2%, while sales dropped by 27%.

In the city of Los Angeles, the sale price of existing single-family homes rose by 0.5% to $840,000, while sales dropped by 48%. 

The active listings were seen to increase by 87% in Los Angeles.

On movoto.com, the current resale inventory number displayed is 2058, which is a decrease of 29% from a year ago. But if compared to last month i.e., May 2020, the inventory has increased by 2%. According to Movoto, the median list price per square foot in Los Angeles is $708. Distressed properties such as short sales and foreclosures remained the same as a percentage of the total market in June.

These figures could be calculated to be positive or negative depending on which side of the fence you are buyer or seller? It is quite evident that the Coronavirus pandemic has had a significant impact on home sales. LA home sales were seen to drop sharply in April as it was the duration when the Los Angeles housing market began to feel the full impact of the coronavirus outbreak and the state’s stay-at-home order. In fact, the entire state of California saw the worst sales decline in more than four decades.

At the same time, the Los Angeles real estate market is adapting to the Coronavirus crisis by conducting business using technologies such as virtual showing and e-signatures to aid buyers and sellers with their housing needs in the face of these challenges. Some economic activities are slowly gaining pace; the housing market is expected to remain sluggish for the next few months until the stay-at-home orders are enforced. 

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Los Angeles Real Estate Market Forecast

What are the predictions regarding the Los Angeles real estate market for 2020? Zillow has come up with price trends for the past few years. Since 2015, the LA home price has appreciated by roughly 38% from $545,000 to $753,000. Last year it recorded the seventh consecutive year of home price gains.

According to the Zillow Buyer-Seller Index (BSI) - Los Angeles is currently a balanced real estate market. This calculation is done every month. Based on the last month’s housing market indicators - supply is equal to the demand. That means there are as many homes for sale as there are active buyers in the Los Angeles housing market.

As per the latest Los Angeles real estate market forecast - home prices are predicted to remain flat or decrease slightly in the next few months. This might be due to the short term impact of the ongoing pandemic, which has obstructed the real estate sales activity throughout America.

The question arises whether Los Angeles is going to remain a hot and profitable real estate market amidst the ongoing Coronavirus pandemic?

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In-person Home Showings - Banned in Los Angeles

As per a recently revised “safer-at-home” order issued in April 2020, in-person showings have been totally banned in Los Angeles. According to Mayor Eric Garcetti, transactions related to real estate in Los Angeles are considered “essential.” Buyers are allowed to buy and sellers are allowed to sell their property. 

Real estate agents are no longer allowed to show homes in person in the city of Los Angeles. All kinds of open houses are prohibited at the moment during the crisis and shoppers are not allowed to venture inside the house they wish to purchase. It is a significant change as long as real estate in Los Angeles is concerned.

The California Association of Realtors had already advised agents to totally stop hosting open houses. Before the new order, buyers were still viewing properties in-person. They could go in one at a time but only by taking appointments and by covering oneself by booties and gloves.

Another practice commonly seen is self-guided tours where the real estate agent would open the lock, turn on the lights, open all the closets and wait for the client outside in the lawn.  

But with the increase in coronavirus cases, most buyers now are resorting to virtual tours. 

All these alternative methods of showing real estate in Los Angeles will have an impact on the listing price though it is too early to say. The recent economic uncertainty generated by the rapid spread of the new coronavirus has thrown cold water on LA’s once-hot real estate market. As a result, real estate agents are saying they see fewer new listings and less competition at the moment.

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How Coronavirus is Impacting the Housing Market?

In the wake of Coronavirus, the U.S. government is taking several steps in an effort to keep the financial markets stable and make borrowing costs as low as possible in a scenario where the U.S. economy is moving toward recession. Recently, the Federal Reserve announced a second emergency interest rate cut a few weeks after the outbreak of the novel Coronavirus. Los Angeles real estate market might be one of the hardest-hit in the U.S., according to experts. The recession is likely to be less serious than 2008 and is believed to take a less toll on the housing market.

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Should You Buy a Home During a Pandemic?

Home buyer demand may have diminished in the wake of COVID-19 outbreak but that doesn’t mean it’s gone completely. In fact, according to Fannie Mae’s Home Purchase Sentiment Index - more than half of Americans still believe that it is a good time to buy a home. 

Does that indicate that the road to a home purchase will be easier during a crisis? Definitely not. With social distancing norms in place across the world, real estate agents are in the process of altering their processes. Sellers are indeed more hesitant to have buyers on their properties, but the transaction process has changed drastically and is virtually unrecognizable compared to what it was a few months ago.

Historical real estate data show that summer and spring seasons are the busiest times of the year to buy and sell a home. But with Covid-19, 2020 has brought plenty of new questions about what would be the new normal be? But the question arises: what are the risks and rewards of purchasing a property during a pandemic?

Are you making plans to buy a home during the current health crisis? You probably might try to figure out if this is the right time now - because of job insecurity, travel limitations, home inventory, and other factors. Here’s what you can expect.

1. Virtual tours and online tools to tour homes digitally

Under the present scenario, it’s not possible to be physically present for the most important steps of home buying – especially touring. As video-chat home tours are probably the best option for showing the property to prospective buyers. With social distancing orders, the majority of home tours are now conducted online.

Real estate agents today are using apps like FaceTime or Zoom to walk you through the new home or might rely on pre-recorded videos, interactive floor plans and 3D walkthroughs. Surprisingly in-person tours are just not happening anymore. 

2. Homebuyers relying on expert advice from their real estate agents

Homebuyers are closely working with their real estate agents to get even firsthand knowledge and guidance on every step of the homebuying process. As we all know the housing market is changing rapidly, there’s a greater need for the most up-to-date information on America's Housing Market conditions. Real estate agents have frequently been interacting with their buyers - providing the most recent listings and explaining strategies on how to take advantage of the present real estate market.

Buyers are still present, but their number is decreasing. According to recent data from real estate brokerage Redfin, buyer traffic has reduced by 25 percent as compared to the same period last year.

3. You might have to face less competition  

According to experts, the dynamics of the real estate market has totally changed. Traditionally the spring market is a seller's market. There is a demand for homes now but the competition is less now. Fannie Mae surveyed that 36% of Americans think it’s a bad time to sell a house and about 25% quarter think home prices might drop even further. Experts say that the attitude of selling homes has changed markedly, and people are reluctant to sell their homes during the crisis. 

4. Individual situations, so trust your gut 

Real estate agents will always help their clients by telling them which deal is good and when they should walk away. The same should be true for buyers - individuals should assess their own position. The social and economic landscape in America has shifted dramatically in a very short span of time, making a real impact on individuals’ finances, employment,  health, and safety.

The bottom line

In simple terms, if you decide to buy a home while the Covid-19 pandemic rages on, you can expect technology to play a big role. The traditional real estate transactions are mostly an outdated process that has come done since ages. The whole home buying process relies on brick and mortar meetings for every aspect of it - from open houses to in-person closings. None of these elements allow for social distancing, and as a result, the industry is trying its best to adapt to being fully digital.

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The Housing Market Paused Because of Covid-19. What Next?

The economic crisis arising from the spread of COVID-19 has put the housing market in the United States on pause. In the last couple of months, the new home listings have dropped drastically. Mortgage lending has become more strict, making it truly tough to get a home loan. According to Redfin, the home sales were seen to drop by 9% nationwide in March, compared to the previous months. The drop in April and May is even more dramatic.

The next question is - what will the housing market recovery look like once the pandemic passes and the economy tries to reach a new state of normal? 

Mike DelPrete, a real estate consultant, analyzed the new home listings data for different cities across the U.S. like Portland, New York City, Austin, Seattle, and few in California. He concluded that after reaching a bottom for 3 to 4 weeks, the new listings have gradually started to rise. This suggested that the housing market recovery on a graph was showing a slow recovery back to pre-pandemic levels. Though New York City is still at the bottom point, other cities have started to move up in terms of new listings.

Related data from popular real estate website Zillow - also supports this general theory. According to the data collected in March and April, buyers and sellers are resuming their home searches and will be ready to buy and sell again when the lockdown is lifted. According to Zillow, the pageview date varies across markets. Los Angeles is up by 32%, Austin is up 35% and Houston is up a whopping 56%. New York City is one of the hardest-hit and hence the pageviews are still down at 2%. 

Chief economist of homebuying platform Haus, Ralph McLaughlin, forecasts that the Coronavirus pandemic will cause a sharp drop during the spring and a noticeable rebound in the summer. He also suggests this will be followed by another dip in the fall and then a return to normal in spring next year. He forecasts a 40 to 45% dip in home sales over the next three months, and about a 50% drop in single-family homes for the rest of the year. Home sales might drop drastically but notably he does not expect home prices to fall much. 

Forecasts and predictions made in the midst of the pandemic might not be absolutely right because there are so many uncontrollable variables. Today it’s unknown how long the Coronavirus pandemic will last, whether there will be a second wave of it during fall, or how well state and federal officials will manage the crisis. Moreover there is also the unresolved issue in the mortgage industry surrounding mortgage forbearance. In today’s scenario, federal regulators have offered up to a year of mortgage forbearance for homeowners affected financially by the pandemic. Will this relief be enough for homeowners?

The course of the economy will be governed by the course of the Coronavirus. If it doesn’t last a long time the real estate market will be fine. If we’re not out of this in just a few months we will have a real problem ahead. It will certainly slow down the housing market recovery. 

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What are the Questions to Ask When Touring a House on Video-Chat

You must have recently seen video-chat home tours surge in popularity. There are plenty of questions you should consider before touring homes in person. But how should it be when you are told to follow social distancing. Whether you’re moving to New York for a new job or upgrade your home in Portland or because your family is growing- whatever be the reason you need to buy a home, you will most likely be taking a home tour on video-chat. 

So, below are some questions to consider to ask your agent so that you have access to all the information you need after your next video-chat home tour.

Questions to ask during your video-chat home tour

1. If there is a floor plan of the home which you could reference during the tour? This could help to give you a better idea of the size and layout of the rooms.

2. Be clear about which features of the house you would be interested in focusing on. Which areas to spend extra time and which areas to show multiple angles.

3. What are the noise levels both inside and outside the home? If a house is on a busy street or near public areas, you need to find out the volume as it might be of concern later. 

4. What direction is natural light coming into the house? This can help you gauge how much light you would expect to get in certain rooms during sunrise and sunset. 

5. Can you ask your agent to open any curtains or blinds so you can see all possible views? Sometimes a seller might be hiding an obstructed or unsightly view if a window is covered up.

6. You need to check how old the kitchen appliances are? The life expectancy of kitchen appliances is easily overlooked during a video home tour as it is not easily caught on cameras. 

7. If you are touring a single-family home, you need to know how close your neighbors’ homes are. This would help you get a better idea of potential surrounding noise levels in the area. 

8. If you are touring a condo, you should see the hallways or amenities of the building. This would help get a better sense of the adjoining area. 

9. If there’s landscaping, check if it is well-maintained with quality materials? Curb appeal plays a very big role in increasing the value of a home.

10. Look out for anything that might be of concern? It could be possible water damage, a crack in the wall, any damage to the roof, or chipped molding that you did not notice.

Video-chat tours were a futuristic concept only a few weeks ago, but now buyers are making offers after taking video-chat tours. Real estate agents are still active in the market, with new tools like video-chat for stepping up the buying process. So, if you plan to take advantage of the market during this historic crisis, you can find different types of tools that would help you maintain social distancing while choosing your property.  

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Easy Tips for Giving Your Space a Morale Makeover to Increase Productivity

With the spread of the Coronavirus pandemic, our homes are now working as fulfill offices, classrooms, gym and community center - and at times, it feels uninspired by being surrounded by the same space day after day. This is because the majority of Americans are following stay-at-home orders to prevent the spread of coronavirus. Do not lose your hope. There are easy and inexpensive ways to transform your home into a fresh and stimulating environment.

Give your space a makeover with these four tips from interior decorators, design enthusiasts and feng shui experts.

1. Experiment with color

Painting the walls gives a new makeover. It is perhaps one of the easiest and cheapest ways to energize any living space immediately. Opt for cool neutrals for a classic look that will hold up against almost any decor. In contrast, if you prefer something more dramatic, consider adding a pop of color to a feature wall. Many feng shui experts and interior designers recommend shades of blue and green as they are mostly associated with health, calmness and well being. If you are not ready to commit to painting at the moment, experts suggest using accessories like curtains, throw pillows, an area rug or artwork to bring color into your space.

2. Declutter and streamline

With thousands of us now working and living at home for hours together alongside family members and roommates - our houses have suddenly seemed more cramped than ever before. According to experts decluttering helps to reduce anxiety and stress - works as powerful magic in getting your entire space to become lively. Remember the benefits of a tidy space extend beyond aesthetics - research has found that clearing clutter aids in lowering stress levels.

3. Lighten up

According to a Harvard Business Review, natural light is perhaps the best way to light up your space. If your home is your office now, you should have more control over the light conditions of your home. To maximize your exposure to natural light, position your desk near a window or an open space, especially during the daytime. If you do not have much natural light entering your room, you can use aluminum mini-blinds on your windows to light up the room. You can also try adding reflective surfaces in your house like a mirror or lacquered table to enhance the light in the dark rooms. 

4. Purify and greenify

While you stay at the same place, you can try bringing the outside world inside. Experts believe that to make a space feel livable, bring in some elements of green, helps a lot. Plants are preferable not only because they bring light and color, but they also add oxygen to your home, making indoors healthy. Some prefer less fussy plants that are easier to deal with, whereas others want high-maintenance plants that require more attention. Whatever plant you choose - the ritual of maintaining it can be deeply healing. If you can not visit nurseries during the coronavirus closures, you can buy plants online. 

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Effective Tips to Make Your Home Stand Out During a Virtual Tour

The real estate industry has seen several transformations in recent time - shifting to a digital landscape or a digital revolution is occurring. We’re all seeing the effects of COVID-19 on the US housing market, with stay-at-home orders most of the traditional open houses are seen to be temporarily at halt. Not to worry with the concept of virtual tours, you can still showcase your home online and reach potential buyers without face-to-face contact.

With virtual home touring options like 3D walkthroughs and live video-chat tours, interested homebuyers can still interact with agents and explore every aspect of the home, almost as if they were touring in-person. With virtual tours, you can easily attract homebuyers from any location. If a person living in Atlanta, GA, is interested in buying a  home in Portland, OR, they can still virtually tour your home, with no big hassle.

Here are some tips to make your home stand out during a virtual tour and impress potential homebuyers.

1. Stage for a picture-perfect home

Staging is becoming more and more important these days. Start by staging rooms that might influence the buyer’s decision, including the living room, entryway, master bedroom, and kitchen. Rearrange or remove furniture to make space appear larger. Stage by adding flowers to the kitchen table for a splash of color, and arrange decor to make it more appealing. Remove any family photos to wipe away that personal touch. You can consult home stagers as they use photo-editing software to transform rooms by adding furniture and decor into the photos of your home.

2. Enhance your house with the required lighting

Always remember, lighting is an essential component when it comes to creating an eye-catching atmosphere, and this is especially true with virtual tours. The house will look it’s best on camera during the mid day. Try keeping your window shades open and let the natural light come in as much as possible to help the room look brighter and feel larger. On the other hand just try to avoid artificial lighting that overpowers the space too much.

3. Transform rooms with the perfect paint color

Whatever be the color of your living room, or your kid’s room, take this opportunity to repaint the interior walls and try opting for a camera-friendly shade. This is an inexpensive fix that 60% of the realtors recommend. Try selecting lighter, neutral paint colors as they show best in video while darker colors give a smaller look to the space.

4. Clear your home of clutter

During a virtual tour, potential homebuyers often try to imagine the space as their own. This can be difficult at times if you piled up things in your house. Personal items can tend to take a buyer’s attention away from the features that actually need to be focused. So try to  clear off your bathroom countertops and kitchen stuff as much as possible to make the space look tidy. You can also donate things you no longer need. In other words try to create a more open and calming atmosphere for your potential buyers.

5. Try having professional photos

During the Coronavirus pandemic, additional safety measures are being taken. Now it is important to have your home staged and “showing ready” for the shooting, as photographers will not move anything inside the homes.

The listing photos make the first impression. These photos are the first thing a potential home buyer sees of your home and may determine whether they should be requesting for a virtual tour. Hence it becomes all the more important to make your home stand out against the competition with professional photos. Professional photographers know the correct lighting, angles, and other minor details that capture it’s selling points, and attract the attention of potential homebuyers. If you do want to showcase your interior, capture a bit of the neighborhood, or highlight the breathtaking view, or consider having aerial photos taken from some unique location.

6. Highlight your home’s best features

What are the features that make your home attractive? Is it the recently renovated kitchen appliances, large green outdoor space, extensive breakfast bar, or simply the open floor plan? Whatever it might be, it is likely your favorite features of the home that will also attract potential homebuyers. So, make sure to highlight these features in your photos and also in your virtual home tour.

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Real Estate Video Marketing Used to Sell More Property

It is difficult to think of a business that has not been impacted by the coronavirus pandemic. It is difficult to gauge the impact of the crisis precisely at this point. The real estate market is struggling with regulatory changes, project delays and low sales for the last couple of months. 

In today’s fast and busy world, people have become a lot more tech-savvy when browsing the internet and video is where people are spending most of their time. Most homebuyers prefer to see properties that have videos online. 

Video Marketing has been the latest trend among homebuyers, especially during the crisis. As we all know - a picture is worth a thousand words, well a minute of video is worth 1.8 million words.

What are the benefits of Video Marketing?

Videos have higher rankings on Google searches, by 53%

While viewing videos, visitors tend to stay longer on your website, say up to 2 minutes longer.

Videos account for 90% of all internet traffic.

Most real estate companies use videos to speak about their property and communicate with their clients and 65% of consumers will visit your website after watching a video about your brand.

You would be surprised to know that over 2 million visitors visit youtube on a regular basis making videos an obvious choice when exploring a property. In simple terms, videos attract 3X more visitors to your real estate listings or your website.

Moreover, real estate videos are 100% more engaging and video marketing can get you more leads, more exposure, more social engagement where clients start talking about your listings. 

As a real estate agent, if you’re not producing online videos for your properties, you’re missing the boat! Start today. You can reach out to experts who can help create online real estate videos for your properties and help you get the most out of your listing.