The following article was published a few days ago in the Los Angeles Times:

"Demand for move-up and high-end homes surgedas mortgage interest rates remained near historic lows. Investors remained a significant force, and for-sale inventory remained well below last year's levels, underscoring the competitiveness of the market.

"You are seeing strong demand against very limited supply, and that's putting upward pressure on prices," said Esmael Adibi, director of Chapman University's A. Gary Anderson Center for Economic Research.

The median price for a Southland home last month reached $357,000, up 3.3% from the previous month and 23.1% from April 2012. It was the highest level for the region's median home price since June 2008, when it hit $360,000.

The median price is the point at which half of homes sold for less and half for more.The data represent completed sales, meaning the increases are representative of buyer demand in early April and previous months.

The market has heated up even more since then, real estate agents said.

"If anything, it seems like things have gotten more crazy," Lakewood real estate agent David Emerson said.

The median has increased year over year for 13 consecutive months, with double-digit gains in every month since August. The median nevertheless remains 29.3% off its peak of $505,000, from summer 2007.

"From an affordability perspective, this remains an excellent time to buy," said Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. "The price movements in the middle to upper ranges is consistent with a market that is normalizing."

Median prices are rising in part because higher-end properties are selling faster than entry-level homes. But other price measures that seek to account for the mix of homes soldhave also confirmed a fast-rising market. The Standard & Poor's/Case-Shiller index indicated that prices in the Los Angeles metro area, which includes Los Angeles and Orange counties, had risen 14.1% year over year in February.

The eye-popping price gains have unleashed a debate about how long they will last.

Syd Leibovitch, president of Rodeo Realty, predicts home prices will post significant increases into 2015.

"You haven't seen anything yet," Leibovitch said. "We are still just correcting."

Others predict price gains will slow as more inventory comes onto the market.Glenn Kelman, chief executive of online broker Redfin.com, said he's seeing more inquiries from potential sellers.

"People we are talking to about selling their homes are getting more interested in it," Kelman said. "We are starting to see bidding wars ease slightly. They were very intense a month ago, with usually more than 10 offers, and now it's more like three or four."

The number of listed homes increased slightly in April but remained low, according to Realtor.com. In Los Angeles County, listings were up 1% from the previous month but down 45% from the same period a year earlier. In Riverside and San Bernardino counties, inventory was down 1% from the prior month and 36% from the same month a year earlier."

Interest rates inched up a bit again this week.The following are excerpts from the newsletter on interest rates published by HSH Associates :

" There was precious little good economic news to be seen this week, but interest rates firmed anyway, as stock markets continue to find reasons to push higher.

As the economy oscillates, so go mortgage rates. A spate of poor economic news pushes them down; optimism about the economy lifts them again. The Fed even remotely considering expanding or extending QE3 presses them lower while remarks and expectations that the program will end sooner kicks them higher. Modest moves upward and downward happen with a regular frequency with little discernable direction or trend to be seen.

So round and round we go. All we know for sure is that we remain fairly distant from the Fed's goals of 6.5% unemployment in a context of stable prices at or around the Fed's goal of 2 percent inflation.

The headline CPI declined by 0.4% in April, a second consecutive month of falling prices, dragged down by another decline in energy costs. Core CPI, among the Fed's preferred measurements of inflation, expanded by the barest amount of just 0.1%. With the two-month slippage, the headline CPI is now at an annual rate of just 1.1% (the lowest since 2010) with a core CPI of just 1.7 percent. Both measures had been running close to the Fed's goals at times over the last six months of so, fostering some speculation that inflation might be becoming more of a concern and that QE programs would need to be dialed back more quickly. The reality of the situation is that with a Eurozone in recession and slow growth here, in China and elsewhere, inflation will continue having a hard time getting a toehold for some time yet.

Collectively, what do we have? Low and falling inflation. A soft and perhaps weakening manufacturing sector. A labor market which seems to be having as many setbacks as advances, and a housing market which is better than a few years ago but a long way still from full health. We have a Fed which is committed to keeping its foot on the throttle, at least for a while yet, and an economy which is grinding its way slowly forward. How equity markets can be so cheerful in such an environment is puzzling, but it is worth noting that the US is the best (perhaps only) investment game in town at the moment, as there are few places to put cash that will produce any kind of return.

As long as enthusiasm for stocks persists, we are likely to continue to see mortgage rates holding above record or even recent lows. However, until there are clear signs that the economy is accelerating, unemployment is steadily falling or prices are regularly rising there is little reason to expect that the Fed will change course anytime soon. Collectively, this should keep us tethered at very low levels even as we experience fits and starts of good and bad news driving rates up and down. We had a run up in mortgage rates in the mid and late winter and a mostly downward run since then. For the moment, we are headed back upward, but this upcycle may not even reach the 2013 highs of March.

That said, we do expect another 3-4 basis point rise in rates next week. "

The following are interest rate quotes from Al Hermann of American California Financial:

The inventory of unsold condos and townhomes on the Palos Verdes Peninsula of 34 units dropped during February after rising last month, and is down approx. 31% compared to a year ago. The average number of sales per month over the last 3 months of 9 units per month is down slightly from a year ago. There are 18 units in escrow at the end of February, however. Click here for a current search for condos and townhomes available for purchase on the Palos Verdes Peninsula.. Make sure and scroll down to see the entire report.

Apr. 13 Mar. 13 Curnt vs. Prev Month % Change Apr. 13 Apr. 12 Curnt vs. Same Month 1 Yr Ago % Change Feb. 13 to Apr. 13 Feb. 12 to Apr. 12 Curnt vs. Same Qtr 1 Yr Ago % Change For Sale 28 34 -17.6% 28 44 -36.4% 32 46 -30.4% Sold 14 16 -12.5% 14 19 -26.3% 12 14 -14.3% Pended 20 17 17.6% 20 19 5.3% 17 16 6.3%

Apr. 13 Mar. 13 Curnt vs. Prev Month % Change Apr. 13 Apr. 12 Curnt vs. Same Month 1 Yr Ago % Change Feb. 13 to Apr. 13 Feb. 12 to Apr. 12 Curnt vs. Same Qtr 1 Yr Ago % Change Avg. Sq. Ft. Price 380.7 370.9 2.7% 380.7 312.9 21.7% 367.1 310.4 18.3%

The low level of inventory of only 34 units for sale and the average monthly sales over the last 3 months of 9 units sold equates to only a relatively modest 4 months of inventory. The chart below is based upon the sales for the most recent month only.

 

The average list price for a condo or townhome on the Palos Verdes Peninsula had increased significantly during 2012, but dropped sharply in January. but is still 12% higher than a year ago,however, lower priced units have been in greater demand.  The average sold price, however, is up 19% compared to the prior years comparable 3 months.

It is imperative that a buyer of a condo or townhome unit carefully reviews the financial condition of the homeowners association. It is also important to determine the number of units occupied by renters in the project, as many lenders will not lend on a project that has too high of a percentage of non-owner occupied units.

With historically low interest rates and the recent correction in the market, with proper research, now is actually an excellent time for buyers to buy a condo or townhome on the Palos Verdes Peninsula.

Apr. 13 Mar. 13 Curnt vs. Prev Month % Change Apr. 13 Apr. 12 Curnt vs. Same Month 1 Yr Ago % Change Feb. 13 to Apr. 13 Feb. 12 to Apr. 12 Curnt vs. Same Qtr 1 Yr Ago % Change For Sale 139 106 31.1% 139 178 -21.9% 117 179 -34.6% Sold 63 69 -8.7% 63 55 14.5% 59 48 22.9% Pended 75 72 4.2% 75 59 27.1% 68 60 13.3% The average price per sq. ft. for homes sold over the last 3 months of $488 per sq. ft. is up 6% from the same compared to the comparable period last year.

 

 

 

 

 

Apr. 13 Mar. 13 Curnt vs. Prev Month % Change Apr. 13 Apr. 12 Curnt vs. Same Month 1 Yr Ago % Change Feb. 13 to Apr. 13 Feb. 12 to Apr. 12 Curnt vs. Same Qtr 1 Yr Ago % Change Avg. Sq. Ft. Price 513.1 484 6% 513.1 486.1 5.5% 487.7 459.1 6.2%

Based on the average monthly sales of 59 homes over the last 3 months, the current inventory of 139 homes for sale equates to a 2 months inventory, which historically is extremely low.

The average price of the homes sold on the Palos Verdes Peninsula during the last 3 months averaged $1.4 million, up approx. 12% compared to the average price of homes sold in the comparable period last year. The average listing price for homes during the last 3 months of $2.9 million had been rising steadily over the last 10 months, however decreased slightly in April. The large difference in average list price and the average price of homes sold shows that the lower priced homes are selling faster than the higher priced homes.

Apr. 13 Mar. 13 Curnt vs. Prev Month % Change Apr. 13 Apr. 12 Curnt vs. Same Month 1 Yr Ago % Change Feb. 13 to Apr. 13 Feb. 12 to Apr. 12 Curnt vs. Same Qtr 1 Yr Ago % Change Avg. Active Price 2780 3054 -9% 2780 2273 22.3% 2900 2279 27.2% Avg. Sold Price 1397 1362 2.6% 1397 1369 2% 1373 1226 12%

Days on Market to sell a property has been averaging approx. 3 to 4 months, and properties are selling at approx. 94% of original list price.

For other market reports for the Palos Verdes Peninsula, go to Market Reports on my website.

Interest rates moved down again a bit this week but new brighter economic news may indicate an uptick in rates next week.The following are excerpts from the newsletter on interest rates published by HSH Associates :

"A cascade of fresh economic data came out this week, variously reflecting economic conditions in both March and April. A "big picture" look at the data might lead one to an "economy is still troubled" conclusion despite the current 2.5 percent run rate for Gross Domestic Product.

Mortgage and other interest rates had been on a flat to easing trend for much of the week as most of the data did little to dispel the notion that we remain in a rough patch, one even the Federal Reserve implicitly acknowledged at the close of its meeting on Wednesday.

There was plenty of downbeat news available this week to create additional cause for concern, but one or two shining reports took the gloom out of the market, at least for now. Mortgage rates are likely to rise somewhat next week as a result.

The Federal Reserve held a regular policy meeting on Tuesday and Wednesday. No changes to interest rates or QE3 came as a result of the get-together, but there was a subtle change in wording about these unusual economic support tactics. "The Committee is prepared to increase or reduce the pace of its purchases to maintain policy accommodation..." noted the Fed. No releases which followed the end of previous meetings since QE3 began have mentioned the possibility of expanding these programs, and recent market buzz has been centered around their demise, whether all at once or though a processing of "tapering" off Treasury and MBS purchases. That the Fed might consider increasing the size of the programs does reveal that they are worried about the slowdown at the end of the last quarter and what seems to be the start of this one.There would appear to be plenty of reason for concern, too, since April's numbers so far are coming in little better, if not worse, than March.

As far as interest rates go, it took an accumulation of fair economic news over a period of months and some considerable market optimism about the economy's future to bump them up during the late winter and early spring. That trend did an about face over the last six weeks or so as the economic news turned decidedly darker. Is the employment report the start of a new spate of solid news, or simply a bright spot in an otherwise dim sky? One report doesn't change the overall trend, buy may be enough to allay concern about a deeper downturn forming.

For the moment, the brighter employment picture on Thursday and Friday was sufficient to cause a reversal in the decline in interest rates. The influential 10-year Treasury bounced upward by more than a tenth-percentage point on Friday, so it's to be expected that at least some of that will show in mortgage rates as we round into next week. Many popular mortgages have been easing to record (or near record lows) but will move away from them next week, when a 5 or 6 basis point rise ."

The following are interest rate quotes from Al Hermann of American California Financial:

Following is my summarized real estate market report for the 1st quarter of 2013 for the Palos Verdes Peninsula and South Bay Los Angeles areas. I have been fortunate to sell over $13 million of properties on behalf of my clients in 2012, earning me a spot in the top 15 of over 600 agents in Remax Estate Properties, and selection to the Remax Hall of Fame as well as the Remax Platinum Club. 

The current real estate market is dominated by the extremely low level of inventory of homes available for sale.This market is a "Perfect Storm" of factors that make now an amazing time to sell a home. These factors include record low interest rates for buyers,  the lack of competitive properties for sale making for less competition to sell your home, and an improving economy. Many homes are receiving multiple offers. Sales prices are expected to be relatively stable over the near term, however there is some downside risk.  There is a threat that Congress may limit certain real estate deductions such as mortgage interest or property taxes.  In addition, when the economy improves and interest rates increase, this will also lead to pressure on home prices. All in all, I believe that now may be the best time to sell a property in the foreseeable future. If you may be considering selling your home in the near future, I would be happy to discuss your homes value with you.

2013 1st Quarter Market Report Palos Verdes Peninsula and South Bay Single Family Homes

The real estate market sales activity for the Palos Verdes Peninsula continued to improve during the 1st quarter 2013, with overall sales volume up about 35% and the inventory of homes for sale down 41% compared to the first quarter 2012 sales, which is equal to less than 2 months of inventory. Pricing has started to increase, and buyers who can get financing are actively looking and aggressively offering where they see a deal. Sellers who are motivated to move are pricing their homes to sell. Buyers are taking advantage of significant discounts and continuing record low interest rates.Buyer demand has led to many homes receiving multiple offers.

PRICE CHANGES:

Properties, on average, on the Palos Verdes Peninsula are selling for approx. 94% of list price. The average price per sq. ft. for Palos Verdes homes sold in the first quarter 2013 of $474 compared to the first quarter 2012, increased approx. 4% overall, but varied city by city. Prices per sq. ft. are down approx. 18% on the Palos Verdes Peninsula from their peak in 2007 of approx. $600 per sq. ft.. Prices in the South Bay, however, have decreased much less than other areas in Southern California due to the relative few number of foreclosures compared to other inland areas.

The following is a chart of the sales price per sq. ft. for homes on the Palos Verdes Peninsula. ( Note: I prefer to analyze average price per sq. ft. trends as the more often quoted "median" sales price is highly dependent on the mix of homes sold between less expensive homes and higher-end homes):

The following is a chart of the number of single family homes for sale, sold, and currently in escrow ( Pended) on the Palos Verdes Peninsula. Sales volume has increased to an average of 54 homes sold per month during the 1st Quarter, a 35% increase over the 1st quarter of 2012.There are 75 homes in escrow at the end of the first quarter 2013.

The figures included in the table below are only for the three months in the 1st Quarter :

The total inventory of single family homes for sale in the cities listed above is down approx. 44% compared to the prior year, the sales activity is up 15%, and there is less than 2 months of inventory. For most of the last two decades, L.A. County has averaged an 8 month inventory. Homes in the lower end of the price range have also been selling faster than the higher priced homes. Average price per sq. ft. for homes sold in the 1st quarter 2012 for the cities listed above is up approx. 5% overall compared to the 1st quarter of 2012.

FINANCING (See our web blog at http://mmegowan.activerain.com/for rate updates):

Interest rates for Conforming Loans ($417,000 and below) are at approx. 3.4%, unchanged from the end of 2012. Rates for 30 year loans between $417,000 and $625,500 (conforming jumbos) are approx. 3.625% , and 15 year loans are at approx. 3.0%.Conforming loans generally require a 20% down payment (less for FHA or VA loans). Interest rates on Jumbo 30 year fixed rate mortgages (loans in excess of $625,500) have an average rate of approx. 3.9%. All of these rates are still near record lows. The spread in interest rates between conforming loans and jumbo loans has narrowed considerably over the last year or so as more banks are participating in making jumbo loans. Jumbo loans require a higher down payment of 25 to 30%. All rates above are APR rates as of 1/17/2013, and assume a 20% down payment, no points and a FICO score of at least 740.

First Quarter 2013 Market Analysis for Palos Verdes Peninsula Condos and Townhomes

The average price per sq. ft. for townhomes and condos on the Palos Verdes Peninsula has increased approx.11% compared to the first quarter of last year, and averaged $349 per sq. ft. during the 1st quarter 2013. Average monthly price per sq. ft. has increased in each of the last 3 months.

The following is a chart of Palos Verdes Peninsula condos and townhomes for sale and sold over the last year

The inventory of condos and townhomes for sale of 34 units at the end of the 1st quarter of 2013, a 24% decrease from this time last year, and continues to fall dramatically from its peak in March 2011 of 91 units ( a 63% decrease) .The decrease in inventory has resulted in a reduction to only a 3 month inventory of condos and townhomes for sale based upon the average monthly sales over the last quarter.

To check out the various condo and townhome projects on the Palos Verdes Peninsula, see the following link on my website: PV Condos & Townhomes / Townhouses. Each of these project descriptions have an analysis of recent prices paid for sales in each project. You can also see the latest listings for condos and townhomes in Palos Verdes on my website at the following link: MLS Listings - South Bay and PV

Simply Click on the 2013 1st Quarter Remax Market Report Desired Below (Note that Market Information Reports are Year to Date Figures)

Palos Verdes Peninsula 2013 1st Quarter Market Information

Manhattan Beach and Hermosa Beach 2013 1st Quarter Market Information

Redondo Beach 2013 1st Quarter Market Information

Torrance 2013 1st Quarter Market Information

El Segundo 2013 1st Quarter Market Information

San Pedro 2012 Year End Market Information

Palos Verdes Peninsula City and Individual Neighborhood 1st Quarter 2013 Detailed Real Estate Activity

Most recent Palos Verdes Peninsula city market reports:

City of Rancho Palos Verdes 2013 1st Quarter Single Family Real Estate Market Report

City of Rolling Hills Estates 2013 1st Quarter Single Family Real Estate Market Report

City of Palos Verdes Estates 2013 1st Quarter Single Family Real Estate Market Report

City of Rolling Hills 2013 1st Quarter Single Family Real Estate Market Report

Palos Verdes Peninsula ( All Cities) 2013 1st Quarter Condo and Townhome Real Estate Market Report

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