What’s in a Comparative Market Analysis?

Photo by Amir Zee, Antigua Guatemala

A comparative market analysis is a report, usually compiled by a real estate professional right before your house goes on the market. A CMA gives you information (sometimes referred to as “comps”) about houses similar to yours (in size, amenities, and location) that are either on the market, have sold, or were listed but expired (usually, because they were priced too high, and no one bought) within a reasonably recent time period. It's ideal to have your CMA look back no more than three months when the market is in transition and no more than six months in a more stable market.

A good CMA can tell you:

1. what homes like yours are selling for

2. how long it’s taking for them to sell, and

3. what their sale prices were in relation to their list prices (the difference between what people got for their house and what they asked for).

It’s especially important to pay attention to the prices of pending, rather than closed, sales, for the primary reason that they’re the most recent.

Moreover, if you have the opportunity (on your own or with your real estate agent), visit some comparables yourself to see how houses on the market compare to yours regarding price and other features.

Setting the right price from the start is among the most critical steps toward successfully selling your home. This requires taking a close look at what other houses are selling for to judge the relative value of your home. No matter how priceless your remodeled kitchen or finished basement is, the market sets a value, the price a buyer is willing to pay.

If you need a CMA, please let me know, I will be glad to prepare one for you. I am continuously looking for ways in which to improve the quality of my services offered to my clients; I would like to know what you think by commenting on this post.  

Legislature Passes Bill to Provide Equal Tax Break to Registered Domestic Partners

Assembly Bill 2663, carried by Assemblymember Laura Friedman (D–Glendale) and sponsored by Los Angeles County Assessor Jeff Prang, San Francisco Assessor Carmen Chu, and Equality California, has passed both chambers of the California State Legislature with overwhelming, bipartisan support, and has been sent to the Governor for signature.

AB 2663 would close a loophole that caused property owned by couples who had previously registered as domestic partners with cities and counties, but not with the State to be reassessed when the property transferred from one domestic partner to the other. This would otherwise have been excluded from reassessment. Previous legislation had extended this benefit to those who registered as domestic partners with the State. The Bill, if signed, will provide prospective tax relief to those who were reassessed between 2000 and 2015. Those eligible would still need to file with the County Assessor for the benefit to be applied and will have until June 30, 2022, to do so.

If it becomes law, AB 2663 will bring greater equity to the property tax system, help ensure that all have the same access to available benefits, and correct an unintentional loophole resulting from the piecemeal progress towards marriage equality.

What is Days on market" (DOM)?

Days on market" (DOM) is the number of days a listing is active in multiple listing services MLS before it enters into pending status. The chart above showing Long Beach, Belmont height area DOM VS entire MLS. As you see in 2018 homes stay in the market 20-40 days at 90803 zip code.

In general, Consumer spending on home goods and renovations are up, and more people are entering the workforce. Employed people spending money is good for the housing market. Meanwhile, GDP growth was 4.1% in the second quarter, the strongest showing since 2014. Housing starts are down, but that is more reflective of low supply than anything else. With a growing economy, solid lending practices and the potential for improved inventory from new listing and building activity, market balance is more likely than a bubble.

As always, your comments and suggestion are appreciated. Let me know if I can provide you with any information you may need. 

Why Is a 1031 Exchange Important?

photo by Amir Zee, Long Beach, CA

Since 1921, U.S. tax law has recognized that the exchange of one investment or business-use property for another of like-kind results in no change in the economic position of the taxpayer, and therefore, should not result in the immediate imposition of income tax. The exchange rules permit the deferral of taxes, so long as the taxpayer satisfies numerous requirements and consummates both a sale and purchase within 180 days. Real estate investors and commercial real estate practitioners place a very high priority on retaining the current like-kind exchange rules.

So why is a 1031 exchange important? It allows real estate investors to defer paying capital gains and potentially build wealth through real estate investing.

Think about it this way. If you buy a piece of real estate for $100,000 and then sell it for $500,000, you are subject to paying capital gains taxes on your $400,000 profit. From that $400,000, you would lose, say, $120,000 to capital gains taxes. With a 1031 exchange, you might be able to use the full $500,000 to purchase one or more new properties and pay no capital gains taxes at the time of sale. The sale’s proceeds fund new investment properties, which in turn may generate cash flow and appreciate.

A primary and second home or a vacation home held strictly for personal use with no rental activity at all does not qualify for the tax deferral benefits of a Section 1031 exchange. While you’ll eventually have to pay taxes when you sell these new properties, you may be able to make your money go further using a 1031 exchange. These exchanges matter because they can help real estate investors create more wealth. Investors may use 1031 exchanges throughout their careers to buy bigger or better properties and potentially reap the rewards.

Please be sure to subscribe and visit for the future topic. Your questions and comments are welcome. I try to respond weekly.

First-Time Homebuyers Check List

First, let me apologize for a bit longer post today, but I think you will agree, the information eaxplained is helpful. 

Are you gearing up to buy your first place? A first home can seem stressful and overwhelming, and it isn't without its share of potential pitfalls. If you're aware of those issues ahead of time, you can protect yourself from costly mistakes and shop with confidence. For many people, a home is the most significant purchase they will ever make, but it need not be the most difficult.

You Must Know What You Can Afford
As we've all learned from the subprime mortgage mess, what the bank says you can afford and what you know you can afford (or are comfortable with paying) are not necessarily the same. If you don't already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on.

Don't forget significant expenses that only occur once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay, and you'll know how much you can spend on your new home each month. When calculating this figure, use a mortgage calculator to research current interest rates. This will give you an estimate of what your total mortgage payments will be.
Next, tailor your house-hunting to properties in your financial neighborhood. If you end up looking at homes that are outside your price range, you'll end up lusting after something you can't afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford. You may even learn that you can't afford the type or size of home that you desire and that you need to work on reducing your monthly expenses or increasing your income before you even start looking. (Read "Six Months to a Better Budget" and "Get Your Budget in Fighting Shape" to learn more.)

Complete Mortgage Qualification
What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get pre-approved for a loan before placing an offer on a home. (Get the details in "Pre-Qualified Versus Pre-Approved – What's the Difference?") If you don't, you'll be wasting the seller's time, the seller's agent's time, and your agent's time if you sign a contract and then discover later that the bank won't lend you what you need, or that it's only willing to give you terms that you find unacceptable.
Be aware that even if you have been pre-approved for a mortgage, your loan can fall through at the last minute if you do something to alter your credit score, like finance a car purchase. If you cause the deal to die, you may have to forfeit any deposit or earnest money you put up when you entered into the contract. (To learn more about your options, see "Financing for First-Time Homebuyers.")

Estimated Additional Expenses
Once you're a homeowner, you'll have additional expenses on top of your monthly payment. Unlike your renter days, you'll be responsible for paying property taxes, ensuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like a new roof or a new furnace).
If you're interested in purchasing a condo, you'll have to pay maintenance costs monthly regardless of whether anything needs fixing, because you'll be part of a homeowner's association, which collects a couple of hundred dollars a month from the owners of each unit in the building in the form of condominium fees. (For more information, see "Does Condo Life Suit You?")

Not To Be Too Picky
Go ahead and put everything you can think of on your new home wish list, but don't be so inflexible that you end up continuing to rent for significantly longer than you want to. First-time homebuyers often have to compromise on something because their funds are limited. You may have to live on a busy street, accept outdated décor, make some repairs to the home, or forgo that extra bedroom.
Of course, you can always choose to continue renting until you can afford everything on your list – you'll have to decide how important it is for you to become a homeowner now rather than in a couple of years. (For related reading, read "To Rent or Buy? The Financial Issues - Part 1" and "To Rent or Buy? There's More to It Than Money - Part 2.")

Expand Your Vision

Even if you can't afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home otherwise meets your needs concerning the big things that are difficult to change, such as location and size, don't let physical imperfections turn you away.
Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you. (For more information on renovating, read our related article "Fix It and Flip It: The Value of Remodeling.")

Being Swept Away
Minor upgrades and cosmetic fixes are inexpensive tricks a seller's dream for playing on your emotions and eliciting a much higher price tag. Sellers may pay $2,000 for minimal upgrades or spend several thousand dollars on staging. If you're on a budget, look for homes whose full potential has yet to be realized. Also, first-time homebuyers should always seek a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

The Important Things
Don't get a two-bedroom home when you know you're planning to have kids and will want three bedrooms. Don't buy a condo just because it's cheaper than a house – if one of the main reasons you're over apartment life is because you hate sharing walls with neighbors. It's true that you'll probably have to make some compromises to be able to afford your first home, but don't create an understanding that will be a significant strain.

Do the Inspection
It's tempting to think that you're a homeowner the moment you go into escrow, but not so fast – before you close on the sale, you need to know what kind of shape the house is in. You don't want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house's physical condition and the soundness of your potential investment will help you avoid making a grave financial mistake.

Choose your Agent
Once you're seriously shopping for a home, don't walk into an open house without having a real estate agent or broker (or at least being prepared to throw out a name of someone you're supposedly working with). Agents are held to the ethical rule that they must act in both the seller and the buyer parties' best interests, but you can see how that might not work in your best interest if you start dealing with a seller's agent before contacting one of your own.

Consider the Future
It's impossible to predict the future of your chosen neighborhood correctly, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.

Ask Questions:

What kind of development plans are in the works for your neighborhood in the future?

Is your street likely to become a major street or a favorite rush-hour shortcut?

Is there talk of a bridge or a highway to be built in your backyard in five years?

What are the zoning laws in your area?

I offer an hour free consultation in Long Beach for the first-time buyer, Please request your free and no obligation consultation meeting now.

I love your comments and questions. Be sure to subscribe to this blog for future issues. 

Does rising financing costs impact housing market?

The answer is yes. Rising borrowing costs are slowing the rate at which US homeowners are refinancing their homes or turning to home equity for cash. According to a recent report by the Mortgage Bankers Association, mortgage refinancing volume fell to its lowest point since December 2000. Refinancings now represent just 36% of all mortgage applications, the lowest share since September 2008.

As of the writing of this post, The average 30-year fixed mortgage rate is 4.71%, up from 4.70% last week. 15-year fixed mortgage rates decreased to 4.13% from 4.15% this week.  A 760 credit score or higher generally will qualify you for the best mortgage rates. However, you don’t need excellent credit to qualify for a mortgage. It’s challenging but possible to get a mortgage with a credit score under 620. 

If you pass the FICO score test and the lender says you are creditworthy, the next item you will be evaluated for is your “capacity.” Capacity means that based on the lender’s allowed maximum percentage debt to your gross income, less all of your other debt payments, how much do you have available for a housing payment? It also has to be stable income, such as your income per year for two years in a row.

Please call/email me with any questions you may have. Also, be sure to subscribe for future discussion on this site, as I try to answer your questions regarding real estate and mortgage-related issues. 

what is Senior Citizen's Replacement Dwelling Benefit?

photo by Amir Zee | Laguna Beach, CA | iphone6 & montage 

Persons over age 55 or severely and permanently disabled may qualify for property tax savings when they sell their principal home and buy a replacement residence of the same or lower value. To learn how to qualify, read the following fundamental questions and answers.

PROPOSITION 60:
FOR QUALIFIED PERSONS OVER 55
Proposition 60 amended the California Constitution in November 1986. It allows qualified persons over the age of 55 to transfer the base year values from a former residence (“original property”) to a replacement residence under certain conditions.

Who is a "qualified person"?

First, the claimant must be age 55 or older, and own and occupy the original residential property as the owner’s principal residence as of the date of transfer to a new owner. If the claimant is married and resides there with his spouse, then both spouses qualify if either one of them is at least age 55 as of the date of transfer.

What is a “transfer of the base year value”?
Let’s take this step by step. The base year is the year in which the property or portion thereof is purchased, newly constructed, or a reappraisal ownership change occurs. The base year value, also called “original base year value,” is the full market value of the home in the base year. The total market value is typically determined by either the purchase price or the Proposition 13 value. Proposition 13 was a 1978 amendment of the California Constitution (Article XIIIA), aimed at controlling housing price increases. It limited the assessed value of existing homes to 1975-1976 values, limited tax rates to one percent of assessed value (plus any voter-approved surcharges), and limited inflation-based increases to two percent annually. Proposition 13 value is the full market value, adjusted according to these limits. Thus, the factored base year value of the original residence is the original base year value, adjusted by the annual inflation factor for each taxable year under the current ownership. Prop 60 allows this value of the original residence to be transferred to the replacement home.

What other "conditions" must be met to qualify?
Both the original and replacement properties must be located in the same county; and
The original property must have been eligible for either the homeowner’s exemption (claimant owned and occupied it as a principal residence at the time of sale or within two years of the acquisition of the replacement property) or entitled to the disabled veteran’s exemption (a veteran with service-related disability and California resident on January1 of claim year); and The replacement dwelling must be of equal or lesser value than the original property; and The replacement dwelling must have been acquired or newly constructed within two years before or after the sale of the original property as long as the replacement property was purchased or newly built on or after November 6, 1986;

and The original property must be subject to reappraisal at its current "fair market value" as a result of its transfer, by Revenue & Taxation Code sections 110.1 or 5803; and
A claim must be filed within three years of the replacement dwelling purchase or completion of new construction of the replacement dwelling.

What if I jointly own the property with someone who is not my spouse?
The same rule applies. If there are two or more co-owners of a dwelling, all owners qualify if only one owner of record is over 55 and if that owner/claimant occupies the property as of
the date of the transfer.

How often can I claim the Proposition 60 benefit?
The benefits of the Proposition 60 exclusion are granted only once in a claimant’s lifetime. As a co-tenant of the original property with another owner, may I receive a partial benefit if we apply for the exclusion and buy separate replacement homes?
No. Only one co-owner of a qualified original property may receive the benefit in this situation. The co-owners must choose between themselves which one will make a claim. The only exception is a multiple-residence original property (such as a duplex), where multiple owners qualify for separate homeowner’s exemptions. In that case, each owner may transfer a portion of the original property’s value to his separate replacement dwelling.

Does Prop 60 apply if I make a gift of my original property to my children and I buy a replacement?
No. A gift of the original home to the owner’s child, while the owner is alive or through a will upon the owner’s death, does not qualify. The original property must be sold in exchange for something of monetary value (“consideration”) and be subject to reappraisal at full market value at the time of transfer.

What is "equal or lesser value" of the replacement dwelling?
In most cases, where the replacement property is purchased before or at the same time as the original, the market value of the replacement must be 100 % or less of the market value of the original.

Must I buy the replacement home before I sell my original residence?
No. You have up to two years before or after the sale of the original residence to buy a replacement. The date of the replacement’s purchase determines the relative market value that is required to qualify under Prop 60. Thus, (1) if thereplacement is purchased or newly built before the original property is sold, the replacement’s value must be 100% or less than the market value of the original; (2) if the replacement dwelling is acquired or newly built within one year after the original is sold, the replacement’s value must be not more than 105% of the original’s value; and (3) if the replacement isacquired or newly built within two years after the original is sold, the replacement’s value must be not more than 110% of the original’s. Market value is not necessarily the purchase or sale price—it is determined by the county assessor.

As the sole owner of an original property, may I qualify when I jointly buy a share of a replacement?
Yes, you may, as long as you are otherwise qualified, regardless of how many co-owners buy the replacement. All co-owners will share your benefit, although they need not join in your claim. You may not claim the benefit again, but the others may. (Ref. LTA 91/80.)

May one sole owner of qualified original home and another sole owner of a separate eligible original home apply their separate Prop 60 benefits to the same replacement residence they buy jointly?
No. Each owner may only receive the benefit of a single claim. The owners may not combine their benefits to buy a replacement dwelling of equal or less value than the original combined value.


PROPOSITION 90:
FOR PROPERTIES IN DIFFERENT COUNTIES
Prop 60 requires that both the old and new homes be within the same county. Prop 90, adopted in 1988, extends Prop 60’s benefits to homes in two counties, but only if the county of the replacement property has adopted a county ordinance permitting the local county assessor to apply the value determined by the county assessor of the original home.

Which counties grant Prop 90 exclusions?
As of October 2000, these counties had adopted an ordinance making Prop 60 benefits available to local replacement dwellings: Alameda, Los Angeles, Orange, San Diego, Ventura, San Mateo, and Santa Clara. For more information, contact the county assessor in the county where you plan to buy.

PROPOSITION 110:
FOR SEVERELY DISABLED PERSONS
Proposition 110 was adopted on June 5, 1990, to extend Prop 60 to severely disabled persons residing permanently in the property. Also, in existing homes qualified for a homeowner’s exemption, certain construction, modifications, or installations intended to increase accessibility for an owner or an owner’s severely and permanently disabled spouse, are excluded from reappraisal.

Do I also need to be 55 or older to qualify?
No. Prop 110 applies regardless of age.

What other conditions must be met?
The replacement property must be newly built or purchased on or after June 6, 1990; and

The disability must be appropriately certified; and
The claimant must not have previously benefited from a replacement dwelling exclusion. However, an exception applies to successful claimants under Props 60 or 90 who later become severely and permanently disabled: they may qualify again, under Prop 110. (Ref. LTA 97/02, R&T
Code §69.5.) Information courtesy of LA County

Housing Shortage at California

Photo by Amir Zee | Long Beach, CA

On the final day of the 2017 legislative session, the California legislature approved, and Governor Brown signed fifteen separate bills aimed at starting to address some of the driving factors of the shortage, such as requiring cities to allow developments that meet their zoning and general plans and allowing micro apartments as small as 150 sq. Ft.

It is evident due to the housing shortage, housing prices increasing this year. Interest rate still low between 4% - 5%.

According to California Association of Realtors, affordability for a single family residence is 31% and the median price of $538640. Condominium affordability is 39% with the median price of $449720. 

If you have any questions or comment, please contact me, I will be glad to help. Be sure to subscribe for future upcoming real estate issues. 

photo by Amir Zee | May 24, 2018, Long Beach

I am writing this post because few of you ask about the benefit of family trust last week. My answer is to talk to your attorney Before you do anything. Each person situation is different, and an expert attorney in family trust planning will tailor the best plan for you.
Trust may provide legal and tax advantages. Mostly it includes estate planning advantages. Here are some possible considerations you may want to explore with your legal/tax/lender/escrow professionals:

1) If you are getting a loan when you purchase, most banks will not allow you to buy in trust as they require a person (not an entity) to hold responsible for the loan. Some folks who desire to put their home in a trust will file a quit claim deed after closing to transfer Title to their Trust.

2) If your home is in a Trust, it may provide a faster way to transfer rights of ownership where you decide who gets your ownership rights. Possibly avoiding probate and any laws which would default dictate who would get the rights upon your death.

3) If your home is in a trust, it may provide some protection if you are sued personally.

Let us look at two type of trust which are more common in real estate:

A REVOCABLE LIVING TRUST

May be used if a property owner wishes to make provisions for the transfer of property upon death but is not currently ready to make an actual transfer of ownership. For a trust to be revocable, the “trustor” must reserve the right to terminate the trust and retain all trust property. When property is placed in a revocable living trust, there is no “change in ownership,” and thus, no reassessment to the current values.
Upon the death of the trustor, the revocable living trust becomes irrevocable. In preparing a revocable living trust, there should be planning to qualify the real property for the parent-child or another exclusion to avoid a “change in ownership,” and thus reassessment, upon the death of the trustor.

AN IRREVOCABLE TRUST

Is used when a property is transferred during the lifetime —or upon the death—of the property owner, or when the beneficiary of such a trust is changed. These events will (for property tax purposes) generally trigger a reassessment. However, if the parent-child exception applies, and with proper planning, it is possible to leave property to a child in trust and be relieved of the burden of high property taxes. With an Irrevocable Trust, a property owner can maintain ownership of the property for the duration of the owner’s life.

When property is left to more than one child, one of these children may want the property, and the other may seek money or assets of equal value. If the trust provides only the property to each child equally (each getting a one-half interest), it will be necessary for one child to transfer their interest to the other in exchange for an equalizing payment. This would no longer be a parent-child transfer, but would be a sibling-to-sibling transfer, which is not excluded from reassessment—thus, a change in ownership will have occurred, and the property will be reassessed. In either case, consult with a real estate or estate planning expert for advice before claiming any exclusions.
NOTE: This information is not intended as a complete guide regarding property tax laws. Again, please talk to your attorney. Your questions and comments are welcome as always. Be sure to subscribe for future conversations. 

What is Capital Gains Tax Law "When Selling Your Home"

photo by Amir Zee | May 20th, 2018 Long Beach 

Simply put, you may exclude up to $250,000 of your capital gain from tax. For married couples filing jointly, the exclusion is $500,000. Also, unmarried people who together own home and separately meet the tests described below can each exclude up to $250,000.

The law applies to sales after May 6, 1997. To claim the home as your principal residence an aggregate of at least two of the five years before the sale (this is called the ownership and use test). You can claim the exclusion once every two years. Even if you haven't lived in your home a total of two years out of the last five, you're still eligible for a partial exclusion of capital gains if you sold because of a change in your employment, or because your doctor recommended the move for your health, or if you're selling it during a divorce or due to other unforeseen circumstances such as a death in the family or multiple births.

Your gain is actually your home's selling price, minus deductible closing costs, selling costs, and your tax basis in the property. (Your basis is the original purchase price, plus purchase expenses, plus the cost of capital improvements, minus any depreciation and minus any casualty losses or insurance payments.)

Deductible closing costs include points or prepaid interest on your mortgage and your share of the prorated property taxes. Examples of selling costs include real estate broker's commissions, title insurance, legal fees, advertising costs, administrative costs, escrow fees, and inspection fees.

So, for example, if you and your spouse bought a house for $100,000 and sold for $650,000, but you'd added $20,000 in home improvements, spent $5,000 fixing the place up for sale, and paid the real estate brokers at least $25,000, the exclusion plus those costs would mean you'd owe no capital gains tax at all.

There are other situations as Nursing Home Stays, Home Offices and Marriage, and Divorce which I am not explaining it here as they not as common. But, if you have any questions, please call me, I will be glad to answer any questions.

Your comments are welcome. Be sure subscribe to blog for future real estate related issues.  

How to Apply for $7000 Homeowner’s Exemption in LA county

Photo by Amir Zee | Lafayette bldg. exterior 2017

Homeowners Exemption applies to homes that serve as a principal place of residence and amounts to a $7000 deduction from the home's assessed value, saving taxpayers approximately $70 per year.
The Assessor's Office estimates that nearly 400,000 homeowners are still eligible but fail to take advantage of these savings. This exemption can be especially beneficial to low-income homeowners and people on fixed incomes.

While $70 may seem inconsequential to some, over a 10-year period, it amounts to $700 – roughly the price of a new water heater. The Assessor also warns residents against fraudsters who offer to file an exemption for a fee. There is no filing fee, and no need to re-apply once qualified and Assessor's office is happy to help homeowners with the process. For additional information,
please visit the LA Assessor’s website If you own a home and it is your principal place of residence on January 1, you may apply for an exemption of $7,000 from your assessed value. New property owners will automatically receive a Claim For Homeowners' Property Tax Exemption. Homeowners’ Exemptions may also apply to a supplemental assessment if the prior owner did not claim the exemption. Further instructions are included with the claim form. Call 213.974-3211 or 1.888.807.2111 for forms and additional information.

This information is not intended as a complete guide regarding property tax laws. The information here has been derived in part from written and oral opinions from the California State Board of Equalization.

I appreciate your comment and questions. Feel free to post them, and I will be glad to answer them. Be sure to subscribe to blog for future informative posts.

How to Calculate the Fair Market Value of a Home?

Photo by Amir Zee / iPhone 6s / May 2nd, 2018

Utilizing the services of a professional home appraiser is the most accurate way of calculating the fair market value of a home. However, it is possible to crunch the numbers without hiring an appraisal service by analyzing the sale prices of similar homes that have sold in the prior 6 months in the same neighborhood.

The fair market value of the residential property can be calculated by comparing the recent sale prices of similar homes in the neighborhood.

Valuing a home is not an exact science, but professional home appraisers take some critical features into consideration when determining a home's fair market value. These include the property's age, lot size, internal square footage, the number of bedrooms and bathrooms, type of heating system, amenities and overall condition. Location is critical. Homes in a neighborhood with low crime rates and better transportation links tend to have a higher value than homes in which lack these features. The first step is to look at the property with an appraiser's eye and write down its principal features. I provide free Comparable Market Analysis " CMA" of your property. Or you can use What's My Home Worth? To receive your report in few minutes. As always please call me with any real estate questions.

Lastly, your comment and suggestions are welcome. So, drop a line to tell me if like this article.

Why buying a house today is so much harder than in 1950

According to Curbed, In 2016, millennials made up 32 percent of the homebuying market, the lowest percentage of young adults to achieve that milestone since 1987. Nearly two-thirds of renters say they can’t afford a home.Even worse, the market is only getting more challenging: The S&P CoreLogic Case-Shiller National Home Price Index rose 6.3 percent last year, according to an article in the Wall Street Journal. This is almost twice the rate of income growth and three times the rate of inflation. Realtor.com found that the supply of starter homes shrinks 17 percent every year.

It’s not news that the homebuying market, and the economy, were very different 60 years ago. But it’s important to emphasize how the factors that created the homeownership boom in the ’50s—widespread government intervention that tipped the scales for single-family homes, more open land for development and starter-home construction, and racist housing laws and discriminatory practices that damaged neighborhoods and perpetuated poverty—have led to many of our current housing issues. Great article, please read the full story here.

The Changing Math Behind Homeownership in the U.S.

Year	Median Home Value	Median Rent	Household Median Income
1950	$7,400	$42	$2,990
1960	$11,900	$71	$4,970
1970	$17,000	$108	$8,734
1980	$47,200	$243	$17,710
1990	$79,100	$447	$29,943
2000	$119,600	$602	$55,030
2010	$221,800	$901	$49,445

While homes values and rent costs have increased, incomes have not kept pace. All values are national media values. Information via U.S. Census Bureau

According to a new survey by Realtor.com, rising rents, millennials are purchasing homes to address the needs of their families. 

Because of increases in the rent, now, they are rushing to purchase their first home. Realtor.com polled more than 1,000 active home buyers online to come up with its results. It found that, among millennial buyers, 23% cited rising rent as a reason to buy a home. That is more than any other reason mentioned in the survey. 

It also comes as rents around the country are increasing, particularly in urban areas where the cost of living tends to be higher. Relator.com pointed to Department of Housing and Urban Development (HUD) data revealing that rents increased in 85 of the top 100 metro areas, with nine metro areas seeing rents jump double digits from last year.

Your comments and suggestions are welcome. Please if you are first time buyer and need help to start your home purchase process, I will be glad to help you. 

Days on Market (DOM)

Days on Market (DOM) refers to the period of time a property is active on the Multiple Listings Service before a sold transaction occurs and the home sale becomes legally binding, with any stipulated conditions having been met by both the seller and buyer. Simply put: it’s a measure of how many days a home takes to sell.

Arguably the second most referred to real estate statistic, behind price, of course, days on the market is firmly eyed by run-of-the-mill buyers, veteran investors and industry insiders alike.

The faster properties sell (and the lower the DOM), is an indication housing is strong, supply is tight, and conditions are those of a seller’s market. Higher DOM tends to suggest a buyer’s market. As you see above chart, in Long Beach Ave. DOM is about 19 days. Please note this chart is for condominiums only. I love your comments, and please be sure to subscribe, as I add different real estate issue frequently.   

Long Beach, California Real Estate Market update for February 2018

As PWR " Pacific West Association of Realtors reports, The three most prominent national market trends for residential real estate are the ongoing lack of sufficient inventory, the steadily upward movement of home prices and year-over-year declines in home sales. Sales declines are a natural result of there being fewer homes for sale, but higher prices often indicate higher demand leading to competitive bidding. Markets are poised for increased supply, so there is hope that more sellers will take advantage of what appears to be a ready and willing buyer base.

New Listings were up 4.2 percent for Single Family homes and 4.5 percent for Townhouse-Condo properties. Pending Sales decreased 47.2 percent for Single Family homes and 51.3 percent for Townhouse-Condo properties.  You can see all Long Beach, California real estate numbers vs. last year numbers. 

The Median Sales Price was up 9.4 percent to $689,450 for Single Family homes and 8.2 percent to $446,000 for Townhouse-Condo properties. Months Supply of Inventory remained flat for Single Family units but was up 11.8 percent for Townhouse-Condo units. 

In February, prevailing mortgage rates continued to rise. This has a notable impact on housing affordability and can leave consumers choosing between higher payments or lower-priced homes. According to the Mortgage Bankers Association, the average rate for 30-year fixed-rate mortgages with a 20 percent down payment that qualify for backing by Fannie Mae and Freddie Mac rose to its highest level since January 2014. A 4.5 or 4.6 percent rate might not seem high to those with extensive real estate experience, but it is the new high for many potential first-time home buyers. Upward rate pressure is likely to continue as long as the economy fares well.

Downtown Long Beach Real Estate sale

The chart above shows the number of properties sold in downtown Long Beach area "90802 zip code" via the MLS. Increasing sales activity signifies an accelerating market while decreasing activity signifies a declining market. Note that sales activity may also change seasonally. Due to the amount of new construction and City of Long Beach emphasize to improve this district, it is highly recommended for investment. As the city of long beach truly believes, Well-detailed and crafted buildings are highly valued in Long Beach, and new buildings must contribute to this legacy.  To better understand the importance of Downtown LongBeach please read this report.
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City of Long Beach vs Los Angeles County Average Taxable property Values

As Assessor LA county reports, the total assessed value of taxable real estate located within the City of Long Beach is currently $54,043,738,933 (or, $54 billion). This comprises 106,569 properties, of which 79,689 are single-family residences (including condos), 17,312 are residential rental properties, and 9,568 are commercial or industrial properties. Year-over-year growth in Long Beach from 2016 to 2017 was 5.0%.

For the County of Los Angeles as a whole, the gross value of all taxable property is a record $1,473,759,940,499 (or, $1.47 trillion). The net value, which does not include exemptions but is also a record high for the County, is $1,416,125,372,989 (or, $1.42 trillion). This is a 6.04% increase in valuation over 2016 and represents the seventh consecutive year of growth.

The graph below compares average growth in the LA County with that of Long Beach for the period 2003-2017:

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HOW MUCH HOME CAN YOU REALLY AFFORD?

As a general rule, your monthly payment should be one-third of your monthly income. But, When it comes to providing pre-approvals for would-be homebuyers, lenders today are more careful than they were in the years leading up to the market crash 2008, and that means your financial picture will be more rigorously scrutinized to determine your credit-worthiness and develop your max approval amount. Trust me, that's a good thing. The last thing you want is to be house poor. Having a great place to live that you can't enjoy, furnish or even leave because you have no money left won't be fun. 
Consider your take-home pay - what actually goes into the bank after taxes, health insurance, and savings for retirement and college. Then add up all your monthly bills, not just debt but also things like utilities, phone, and groceries. You want to feel comfortable that you can cover all your household obligations while still meeting your other financial goals and keeping six months of expenses in an emergency fund.

That's why it's so important to consider all of your monthly expenses related to buying a home. Beyond the principal, interest, taxes, and insurance that the lender, there are other line items to weave in that will help you determine your purchasing power and also help you to be comfortable from month to month. Here few examples to consider: 
Increased commuter costs, Higher utility bill, Homeowner's Association, Home improvements, Landscaping

Why you should sell ASAP in 2018.

Photo by: Amir Zee 

We’ve seen two or three years of what could be considered unsustainable levels of price appreciation, as well as an inventory shortage that resulted in a record low number of homes for sale across California.

If you are planning to sell in 2018 and you want to sell your home quickly, and for maximum money, your window of opportunity may be rapidly narrowing. Here's why you should get moving ASAP.

1. Rates are still historically low, drawing buyers into the market. Interest rates are on the rise, and it's widely predicted that they'll reach 5% + before year's end. Buyers know that the longer they wait to buy, the more expensive it will be.

2. Inventory remains tight. Buyer demand is high. The housing shortage will likely get worse before it gets better. Realtor.com data predict inventory will remain tight in the first part of this year, reaching a 4% year-over-year decline by March. This year is your window of opportunity.

3. Home prices are still increasing, Realtor.com data suggest a 3.2% increase year over year, after finishing 2017 with a 5.5% year-over-year increase. You still stand to make a pretty profit if you sell this year, but the earlier you can list, the better off you'll be.
4. Millennials are ready to commit; As people move into their 30s, they're looking to move from renting to homeownership.More home buyers flooding the market can only mean good things for sellers—at all price points.

As always, your comment or questions is appreciated.  

Guide to Multiple Seller's Offer Negotiations

It’s possible you as the seller, may be faced with multiple competing offers to purchase your property. Here are four simple and common strategies to deal with the situation. 

1. you can accept the “best” offer;


2. you can inform all potential purchasers that other offers are “on the table” and invite them to make their “best” offer; y


3. You can “counter” one offer while putting the other offers to the side awaiting a decision on your counter-offer;


4. “counter” one offer and reject the others.


Realize that each of these approaches has advantages and disadvantages. Patience may result in an even better offer being received; inviting buyers to make their “best” offers may produce an offer (or offers) better than those “on the table” – or may discourage buyers who feel they’ve already made a fair offer resulting in them breaking off negotiations to pursue other properties. Ultimately you as the SELLER should make the decisions, however, are yours to make.
Working with an experienced real estate agent who will guide you through the negotiation is priceless.

What should I do before selling my home in California?

There are so many reasons you may decide to sell your home. Relocation, Release Equity, Housing Market Conditions, Size Requirements Change, Change in Relationship Status, Changes in the Neighbourhood and many others reasons. No matter what the reason is, you should get ready. You need to maximize the value of your house. The following three steps will help you to get prepared to sell. Then, to be prepared to make a great impression on potential buyers and do the deal.

* Clean and declutter: It may sound obvious, but the importance of cleaning and decluttering cannot be overstated. Here are some ideas to make this process nearly painless.
Get rid of clutter before cleaning. This is the time to purge your house of unwanted and unnecessary items. In addition to donating items to charity, you might consider giving them away through Craigslist or neighborhood sharing groups. Recyclers are often willing to pick up and haul away large metal items for free. The goal is to make your house a clean slate before you get down to cleaning.
Deep clean your house. This step will probably involve the most significant time investment. Get the whole family involved if you can! Think of this as a pumped-up spring cleaning. Pay particular attention to kitchens and bathrooms, and clean the inside and outside of your windows — this makes a striking improvement in the overall appearance of your house.
Organize closets, cabinets, and drawers. In this case, out of sight is not out of mind. Many potential buyers will open cabinets and closets because they are thinking about storage space. If your storage areas are clean and organized, it will send a signal to buyers that you take care of the house.

* Make DIY repairs: Take care of these problems before you show the home for the first time. These are all fixes that you can do yourself.
Fix any leaking faucets and running toilets.
Replace caulking around tubs, showers, and sinks.
Freshen up or repair grout as needed.
Repair walls and repaint them in a neutral, generally pleasing color that complements your home.
Fix cracked or broken windows.
Replace or repair damaged window screens.
Replace burned-out light bulbs.

* Go for curb appeal: First impressions are a big deal. You want potential buyers to be charmed by the outside of your house, so they look forward to coming inside. Extend your pumped-up spring cleaning to the exterior of your home, too.
Trim bushes, shrubs, and trees. Make sure vegetation isn’t touching your roof or siding.
Repair broken downspouts and gutters.
If it’s appropriate for your yard, apply new mulch, river rock, and/or pea gravel. This can do wonders for your landscaping and provide immediate curb appeal.
Clean and repair concrete areas, such as driveways and walkways. Be sure to eliminate any oil or grease stains, and clean out any weeds coming up through the cracks.
Dress things up a little bit. If it’s seasonally appropriate, put out some pots of annuals, which will maintain their color for the season. Freshen up your doorstep with a new welcome mat. Make sure the house numbers are natural to see, and in a style that complements your home.

With just a moderate amount of effort, you can make your house beautiful and welcoming, both inside and out. I will glad to meet you and help you with this improvement. With no fee and obligation, I inspect and let you know what other easy fix you can do. I welcome your comments and ideas.

The Good Neighbor Next Door program

Last week I attended a HUD seminar, which I learned about "The Good Neighbor Next Door program." If you are a law enforcement officers, firefighters, emergency medical technicians and pre-kindergarten through 12th-grade teachers, this program is for you. It is a sweet deal, and you will love it. 

Through this program, you can receive a discount of 50 percent on a home’s listed price in regions known as “revitalization areas.” Using the program’s website, you can search for properties available in your state. You must commit to living in the home for at least 36 months. Eligible Single Family homes located in revitalization areas are listed exclusively for sale through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for seven days.

Check the listings for your state. Follow the instructions to submit your interest in purchasing a specific home. If more than one person sends an offer on a single home, a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD's regulations for the program.

HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this "silent second" provided that you fulfill the three-year occupancy requirement.

The number of properties available is limited, and the list of available properties changes weekly.

To learn more, please see the Good Neighbor Sales Frequently Asked Questions!

I will be glad to help you and answer any questions you may have. Please check the website and see if your area has designated revitalization areas.

What's My Home Worth?

No doubt, selling a home can feel like you’re playing the lottery at times – you might think of yourself as a winner, but you don’t even know how much money you might have left on the table. This is a grave fear these days. On your own, it’s complicated to get an accurate value for your home.
The most significant evolution in real estate market over the last decade is, surprise surprise, the Internet. More than 90 percent of buyers begin their search on different sites all over the internet. So, if you’re done contemplating, and you want to sell your house fast, without the having it sit on the market for months on end, then we can work together. We offer local expertise in a home market tailored to meet your needs. As a local professional, we know the neighborhoods, schools, market conditions, zoning regulations and local economy. We will do the leg work, keeping you up-to-date with new listings and requirements as they impact the market. We will make the process as pleasurable and stress-free an experience for you as I can.

Where is Downtown Long Beach?

Downtown Long Beach Neighborhoods 

Situated on the LA/OC County line, DTLB is directly connected to a robust matrix of freeways and accessible to airports, including Los Angeles International Airport (LAX), John Wayne Airport (SNA), and our own Long Beach Airport (LGB), which serves more than 3 million passengers annually and operates 41 commercial and 25 commuter daily flights. Certainly not limited by cars, DTLB is serviced by the Metro Blue Line, the nation’s most used light rail line with over 80,000 boardings per day. This line provides a direct connection between DTLB and Downtown Los Angeles, allowing users to quickly jump between the attractions and amenities of both cities and all points in between. 

Question is: can you call this place home? For more detail information about DWTB contact me. 

If you are an adventurer looking to explore read this!

With sunny skies and miles of diverse terrain, Long Beach is an ideal place to bicycle. Safe and convenient facilities across the City make cycling fun for families, professional cyclists, and weekend cruisers alike.

LONG BEACH CYCLING TRAILS

90803 , 90802 VS Entire MLS

Please do not let this chart fool you. Even, the 90803 median prices appreciate over entire MLS average, the downtown 90802 area become investors paradise. Potential for grow is tremendous, as all new commercial and residential new project is being built.