Home remodeling market at an all time high and the opportunity for folks looking to sell.

Amid all the news surrounding low inventory of homes and low building starts, another opportunity is getting less attention--the wave of remodeling. Here's what it means for folks looking to sell.

Harvard's Joint Center for Housing Studies recently published data showing a significant rise in the remodeling of homes in the US. In 2015, remodeling in the US totaled $340B a 57% increase since 2001.

Across the board, homeowners and renters alike are spending more money on their homes. And it's true among all demographic groups and cities throughout the US. This appetite for remodeling brings with it many opportunities.

For homeowners looking to sell, I see this as a growing appetite for fixer uppers. Yes, plain and simple. In a previous post regarding Arcadia, I mentioned homes listed below the median selling price have an advantage given the near-term equity potential. This is only strengthened by the increasing propensity of buyers looking to remodel.

From a marketing and positioning standpoint, I think there are many creative ways to target buyers who have a strong appetite and the cash for remodeling. In fact, my wife and I were those exact buyers a year ago. They're out there!

If you're looking to sell and want to talk strategy, reach out. I can tell you what Contempo Realtors can do for you in terms of positioning your home to the best buyers.

Analysis: Real estate price action in Northridge and what buyers and sellers should know.

We looked at over 230 properties in Northridge either currently active or sold in 2017. Here's what the data tells us about the market and what folks should know if they're looking to jump in or if they're already in the mix.

Here are the key takeaways:

• There are currently 105 active listings in Northridge, 89 are single family detached homes and the rest are condos / town houses. This is the size of the active pool buyers are considering if they want to move to Northridge. For sellers, this is your larger competitive pool.
• The average price is $839K, while median is $755K. When average is greater than the median, this means there are a handful of really expensive homes pulling the average up (very common in LA). 
• In terms of size, we have a pretty normal distribution--both median and average are around 1640 sq ft, on the larger side relative to the rest of LA.
• Out of the 105 listings, 32 have changed their price. Most of which (about 85%) have been price decreases. The average price decrease is $33K while median is $22K.
• 134 properties have closed in 2017 thus far. Median selling price is around $600K, while average is $635K. Average days on market is about 53, median is 38. This is the sweet spot for sellers as we move into the selling season.

Okay so what does all this mean?

First, in terms of active listings, Northridge is a very competitive market! 

A big chunk of homes are around the same size, but have significant variance in price. This means plenty of room to negotiate for buyers, and pressure on sellers to defend value. I love this sort of competition. We're seeing this play out in the price action.

Second, we're seeing price action for almost 30% of active listings, with most lowering their price. Agents and their clients seem to be jumping in with high expectations and unfortunately weak marketing skills, because prices are dropping.

Finally, based on the data of closed deals in 2017, we're seeing houses at the lower price points close. This makes total sense right now. With a pretty normal distribution of size, buyers are grabbing deals at the lower end because these homes have the most upside.

This is the type of action I like to see and it's the type of competition I like to get into. If you're looking to jump in the market, or perhaps you're already there, reach out and we can talk strategy.

72 Hour Home Selling Program

Your home sold in 72 hours or we're fired.

Analysis: Active residential listings in LA and where there's lots of action. (Part 1)

We took at look at over 2800 active residential property listings in LA to give you a sense of where there's action and what sellers can expect as the season heats up. Here's what we found.

 Key takeaways:

• There are currently over 2.8K active listings in the greater LA area. This includes single family residences, townhouses and condos. This is the size of the active pool in LA that buyers will be considering in the weeks and months to come. As we mentioned in a previous post, however, you can expect this number to increase significantly towards the end of March all the way up to June.
• The median price of all active listings is currently $988K, while the average is $2.2M. When average is greater than the median, this means there is long tail of very expensive properties pushing the stats higher.
• Right now, 1/3 of all listings are well above $1.5M. This is a pretty solid distribution of competition across all price points.
• Single family residencies account for 71% of all active listings (just over 2000 listings). The median value of single family residencies is currently $1.2M across all areas.
• About 10% of active listings (200) have lowered their price by a median reduction of $29K. That's pretty substantial and indicates plenty of competition for the right buyers.
• Beverly Hills and Pasadena have by far the most active listings with about 200 each. In these types of extremely competitive environments, we can expect more downward pressure on price as properties will compete for the best buyers.

So what does all of this mean? It's simple. The season is just getting started and competition is already ferocious.

What I'm most looking out for is price action. Right now 10% of listings are consistently lowering their price. With more listings entering the market, it will be interesting to see what happens to that number.

I still think it's a sellers market. I do think homes need to be positioned strongly to the right buyers so they can uphold their prices. Right now, at least 10% of homes are missing out on the low housing supply advantage.

Are you thinking of selling your home and want to talk strategy? Feel free to reach out. You can also try our free market analysis service to help you with your research.

72 Hour Home Selling Program

Your home sold in 72 hours or we're fired.

Thinking of selling your home in 2017? Here's what you need to know.

Higher prices and low inventory in LA tell a convincing story for why you should sell in 2017. Many agents are clearly pushing for this narrative. While I generally agree, I always tell folks it all depends on what your objectives are. So here's what you need to know.

1. Keep an eye out on mortgage rates (because your potential buyers are). The 30-year fixed rate in LA ticked down to 4.47%, but is still above the national average. Nevertheless opportunistic buyers (especially those with great credit) will be watching this closely looking to lock into a good rate early. If interest rate expectations hold, expect to see the bulk of loan applications crowd into Q1 and Q2 of this year because mortgage rates will likely go up by end of year.

What this means for you: Get to know the pool of buyers coming in now and what they're looking for in a home. This can give you the upper hand early in the game.

2. Know your competition (I can't stress this enough). A dose of reality early in the game is the best antidote for disappointment down the road. If you're looking to sell your home, you're essentially putting a product out in the market that is competing with others. Some will have different designs, some will have been recently renovated, the list goes on. Here's my point. Ideal buyers will value your home relative to what else is out there.

What this means for you: View the market from multiple angles beyond just price and CMAs. Know how many homes you'll be up against, how they break down by distinct features and designs and who the ideal buyers are in your area. Knowing the demographic shifts are also key in understanding who are the most likely buyers of your home--most CMAs miss this entirely.

3. Higher prices and low inventory can also work against you. Selling your home also means you'll be thrown into a market with higher prices and low inventory assuming you're looking to continue to own.

What this means for you: Narrow down your ideal neighborhoods and understand current playing field of available inventory. The more data and knowledge you have, the less susceptible you'll be to the price advantage of sellers.

I encourage home owners to take advantage of market opportunities when they present themselves. But I also encourage them to be armed with the right data and knowledge so they can maximize ROI.  

Try our free market analysis service and see what we can do for you.

VIDEO: Is LA's luxury housing market optimistic about Trump?

There's no doubt Trump is controversial. But as an investor and agent, it's my job to cut through the yelling from both sides to find new opportunities for my clients. We all know Trump's a real estate guy. So what does that mean for LA's housing market? Here's a really smart video from luxury housing market pros.

LA housing market needs a boost!

The most recent Census report highlights national home ownership rates remained flat at 63.7%. LA, however, continues to lag with a 49% home ownership rate. As we've noted here at Contempo Realtors, low supply, coupled with higher prices can pose a big challenge for buyers. We've gotta make moves and increase supply!

Climbing LA prices means current inventory will be increasingly unaffordable to most Angelinos. Meanwhile, cities like Dallas and Houston are becoming more accessible. With more favorable regulations for development and urban sprawl, Texas certainly has an advantage over California, which is bedeviled with highly restrictive building regulations.

Here's an interesting piece from the Hill about what legislators can do with zoning ordinances to boost LA's housing market.

Are you thinking about selling your home? Do you want to know how all of this impacts you? Please reach out for a free consultation.

Southern California home prices jump and sales fall

Southern California home prices jumped in December, reaching its highest peak in nine years. On the flip side, lower demand has lead to a decrease in actual sales. What does this mean for homeowners looking to sell?

Check out the full article here.