Builders call new-home market ‘unhealthy and unsustainable’

Forced to slow down construction as buyer demand plummets, builders predict lower home starts through 2023.

Single-family home starts dropped in September and were down 5.6% since the beginning of the year, the Commerce Department reported this week. Multifamily construction has dropped 13.2%.

Builders are blaming rapidly rising mortgage rates, ongoing supply chain disruptions, and affordability challenges for the rapid pullback in the new-home market. “High mortgage rates approaching 7% have significantly weakened demand, particularly for first-time and first-generation prospective home buyers,” says National Association of Home Builders chairman Jerry Konter. “This situation is unhealthy and unsustainable".

Builders & Investors! Don't snooze on this Silicon Beach property with approved RTI permits!

For questions call/text the listing agent, Daniel Madariaga, at 818-445-7953. For more info visit CentinelaHome.com.

Attention Builders! This Silicon Beach property comes with fully approved RTI permits to build a 3-story duplex, with an attached ADU, all with an amazing rooftop deck.

Each unit has 3 bedrooms. Two units have 3 ½ baths, and one has 2 ½ baths. The plans also include an attached 1-car garage and 3 uncovered parking stalls.

Located close to Playa Vista, this property is just feet away from the Ballona Creek bike path, which takes you directly to the beach.

If you're looking to build three new units in Silicon Beach, all at a great value, this might be the property for you. RTI permits are available upon request.

Some sellers hitting a tipping point on their asking price

The share of home sellers dropping their asking prices has risen to a six-month high. More home buyers may be starting to feel priced out by the rapid rise in mortgage rates, which may be making sellers have to adjust slightly. The 30-year fixed-rate mortgage averaged 5.27% last week, up from 2.96% just one year ago, Freddie Mac reports.

Hot Home Alert! This Glenoaks Canyon home is on the market - NOW!

Text me if you want a tour at 818-445-7953.

"Hot Home” alert in Glendale's Glenoaks Canyon Neighborhood.

Asking price: $2,499,000

This private home has 3 bed/3 bath, 2,390 sq. ft. of living space, and is on a 20,825 sq. ft. lot.

The eco-friendly home features an open floor plan, 20 ft open beam ceilings, a movie room, and a lofted library/den.

There is an outside deck, an elevated hot tub, a "yoga deck,” and a fountain.

Now YOU can own a 'magical' fairytale cottage in the hills of Hollywood!

This is the most unique property for sale in the Hollywood Hills.

Asking price: $1,395,000

This 3-story fairytale cottage has 2 bed/2 bath, and 1,026 sq. ft. of living space and is on a 2,790 sq. ft. lot.

The design matches the style of Roland E. Hill, legendary architect of the Disneyland Castle.

There are two garden areas outside, a fenced-in grassy yard with a pond, waterfall, and wooden bridge.

Text me if you want a tour at 818-445-7953.

Deutsche Bank predicts US recession in 2023

13 years ago, when many of the homes on the market were bank-owned, I remember looking up for my clients which bank owned the property I was about to show them. The one name that kept coming up was "Deutsche Bank". I could not believe how many foreclosures they were stuck with at that time. Since they know a thing or two about recessions, I advise you to take their opinion into consideration.

"We no longer see the Fed achieving a soft landing," Deutsche Bank economists led by Matthew Luzzetti said in the analyst note. "Instead, we anticipate that a more aggressive tightening of monetary policy will push the economy into a recession."

This Echo Park Spanish bungalow sold WAY OVER the asking price! Take a look.

Here is the cheapest home sold this week in Echo Park.

Asking price: $899,000

Sold price: $1,255,000 ($356,000 over the asking price)

This renovated Spanish bungalow has 2 bed/2 bath, 828 sq. ft. of living space, and is on a 4,280 sq. ft. lot.

The property is close to hiking trails, the LA River bike path, and the historic “hidden stairs".

Fewer buyers searching for a home

In Los Angeles County, the median price increased last month to $781,050, up from $773,490 in February and $689,440 a year ago — a year-to- year increase of 13.3%.

While sales remained solid, there are signs that imply a market slowdown could be forth coming in the second half of 2022. A quarterly report released by National Association of Home Builders suggests that fewer buyers were trying to find a home to buy in the first quarter of this year. The share of prospective buyers who were actively searching declined to 46% in Q122, back to pre-pandemic levels after reaching a recent peak of 61% in Q221.

For those who had not been successful in finding a home, the share who plan to give up their home search until next year or later rose for the third straight quarter to 25% in Q122, after bottoming out at 20% in Q221.

Higher mortgage rates and double-digit growth in home prices are slowing down the housing demand momentum and the effect may become evident very soon.

Source: California Association of Realtors.

New construction home buying rush to continue in 2021

More house hunters—particularly move-up buyers—are being drawn to new-home construction in the COVID-19 pandemic, so much so that it’s driving a surge in construction across the country.

Single-family starts ended 2020 with the best year in home building since the Great Recession, and 11% higher than 2019.

Ultra-low mortgage rates and a shift in housing preferences—including a growing demand for larger spaces, home offices, and outdoor amenities—are driving the increase.

New-home construction will likely grow by 5% during 2021 and hit above 1 million housing starts for the first time in years.

Builders, however, are concerned about several challenges that could affect sales over the next few months, particularly related to rising construction costs.

Lumber prices, up 169% since mid-April, are significantly adding to the costs of building a new home.

Buyers are seeing the increases in home prices too: A median of $16,000 has been added to the cost of a newly built home from the increase in lumber prices alone.

Source: National Association of Home Builders’ data.

Most expensive home to sell this week in Studio City

Original asking price: $4,750,000
Sold price: $4,250,000
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After being on the market for only 25 days, the owner of this #StudioCity home decided to accept a offer that was $500,000 below asking price.
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Do you think the owner was too quick to accept such a low offer... or should the owner have kept the home on the market a little longer in hopes of getting more money?
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Comment "accept" or "wait".

3 years' search for this Glendale home

The buyers of this #Glendale home had been searching for a property for 3 years.
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Their agent put in several offers on their behalf, but they could not get the job done.
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My past client and friend referred them over to me. The buyers came by my office in the morning for my "Buyer Orientation" meeting.
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This is where I take them through the entire purchase process, from beginning to end. 
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In the afternoon I showed them 3 properties. They fell in love with one and immediately decided to put in an offer. 
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After a little negotiating with the seller, my clients got the home for $1,075,000. The sellers original asking price was $1,250,000.
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3 years of searching with another agent... and in 1 day I found them their home.
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I hate to toot my own horn... but... TOOT TOOT!

Most expensive home to sell in Burbank this week

Original asking price: $2,399,000
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Sold price: $1,800,000
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Is a backyard important to you?
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This #Burbank home does not have much of a backyard and still demanded the million dollar price tag.
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If a small yard is a dealbreaker for you, comment below "dealbreaker".