South Bay Real Estate Blog

Our real estate blog examines relevant market trendsrecord sales, design ideas and other insights from our team of expert realtors. 
A discussion of trends and community events in Manhattan Beach, Hermosa Beach, Redondo Beach, Palos Verdes and the surrounding South Bay cities.

Real Estate Investing 101

September 29, 2017

MAKE YOUR MARK WITH REAL ESTATE INVESTING

For some people who are trying to expand their financial portfolio, one of the most dependable methods is real estate investing. That’s not to say it doesn’t come with its own set of risks (as does any type of major investing), but for those who have the means, being the owner or manager of a second property is a fruitful idea. There are different types of properties that someone can ultimately purchase, and how they use it will help determine what sort of return they make on that investment.

HAVE A GOAL IN MIND

Any type of real estate purchase shouldn’t be made on a whim. Given the amount of capital required, you want to have a pretty good idea of your short and long term goals with the investment. Working closely with a financial advisor, create a plan and know what sort of transaction you can actually make. Are you just looking to own a vacation home in another state? Do you want to become the owner of a larger property like a apartment complex or an office building? Each of these ventures is going to to be slightly different in terms of the monetary requirements, tax laws, property laws, and so more more. This is also all going to vary depending on which state you make the investment. This goes back to the the early planning stages, and thinking of all these different angles prior to making those commitments.

RENTING IS AN OPTION

If you’re someone who is simply looking to own another property in another state, you have some flexibility in terms of how it’s used. Once you own it, and fill it out enough to be liveable, you should strongly consider renting it out during the months when you’re not there. If the second-home is in a warmer state like California that has nice weather year round, there is going to be a demand for people to use that space.

However, you should have a well mapped out schedule of when you know you’ll be taking trips to that property, and then you can start advertising to rent it out during those other times. This way, besides just owning a property that can be sold at a later date, you can also get income from renters during their vacation. You obviously need to be mindful of maintenance costs, and how much utilities will be when you’re visiting, and when others are renting. Managing a property like a second home is quite involved, so make sure you know what you’re getting into.

LARGER PROPERTY MANAGEMENT

Another investment opportunity that you see some people taking advantage of is becoming the owner (or partial owner with other investors) of a larger property. This can be an apartment complex, a warehouse space, or an office building. The management of these types of properties is going to be different than just renting out your home for a few times a year when you’re not there. Essentially, you’re also becoming a landlord. This is a far more involved investment, but you can get more consistent return from those who are renting.

Los Angeles is a sprawling city, with a bustling economy, and makes major contributions to entertainment, culture, fashion, science, sports, technology, education, and medicine. It’s also contains very diverse geography, property, and real estate opportunities. One of the most sought after property hubs in Los Angeles is the Greater South Bay area. Found here are some of the most beautiful homes available to buyers today.

LEARNING MORE ABOUT SOUTH BAY REAL ESTATE

The cities in the Greater South Bay are very representative of what many people might consider to be “Classic Californian”. There is a lot of surfing, sprawling beaches, and incredible views. However, there is much more to these cities than simply how beautiful they are on a daily basis.

MANHATTAN BEACH

Known by many as the “Pearl of The South Bay”, Manhattan Beach is an affluent beach down with a variety of real estate options available to homeowners and investors. There are miles of white sandy beaches, well-kept tree-lined streets, all contained within a charming small town feel. If you’re simply visiting, this is a great vacation destination, since there are plenty of award-winning restaurants, and a surprisingly fun nightlife! Manhattan Beach is also well known in the beach volleyball community, since this is the city that started it all.

In terms available real estate, there are 5 different areas of the city: East Manhattan, Manhattan Village, The Hill Section, The Sand Section, and The Tree Section. Each presents a unique style of homes and surrounding local attractions. The entire city of Manhattan Beach has nationally recognized schools, meaning your children will get an outstanding education attending around here. Manhattan Beach has certainly aged well, making it a very modern beach city.

HERMOSA BEACH

Just south of Manhattan Beach, you’ll find the quaint Hermosa Beach. Accommodating to both families and singles, this area of Los Angeles is a hidden pocket that not many people know about. Even during the summer months, you’d be surprised at how open and spacious the city feels, and this is partly due to the very large, clean and accessible beaches.

If you’re looking to purchase real estate here, you’ll be hard pressed to find something that isn’t lovely. You can find a number of properties right along the beach, and even further inland, along the ‘greenbelt’ walking trail, there are homes and apartments that anyone would be impressed by.

THE STRAND

Separating Hermosa Beach, Manhattan Beach, and Redondo Beach property from the beach is the Marvin Braude Bike Trail, which is more commonly known as The Strand. This pedestrian and bicycle path runs directly alongside the beach, and the property on the opposite side is some of the most beautiful (but high-priced) in all of Los Angeles. The Strand helps unify the Greater South Bay beach cities, and lets tourists and residents safely commute between them without needing to worry at all about cars or motorcycles.

FIND THE REAL ESTATE OF YOUR DREAMS

If you’re interested in exploring real estate throughout the South Bay, make sure you reach out to an experienced real estate agent who can show you the area. This is a very desirable market, so you want to find an agent with years of experience and local connections that can help you find the house of your dreams.

HOW A REAL ESTATE AGENT CAN HELP WITH ANY LOS ANGELES RELOCATION

Moving to a new city, especially one that’s so far away from your current home, is definitely difficult. Not only do you have to think about what you’re doing with your current home (selling, renting, or even keeping it and preparing to be away), but you need to start exploring where you will be buying a house. Here are a few different ways an experienced real estate agent can make the relocation easier.

STAYING INFORMED ABOUT THE CHANGING REAL ESTATE MARKET

Los Angeles is one of the most fluid real estate markets in the country, and it has a wide range of properties available. With so much information to keep track of, it’s important to have a real estate agent who is well informed about what’s going on, and keeps all their reports in an accessible housing market watch. They’ll keep you up to date about any relevant shifts or new properties that become available.

BUYING A HOUSE IN LOS ANGELES DOESN’T NEED TO BE DIFFICULT

When moving to Los Angeles, there are quite a few different areas that you’ll be looking at for a house. Where you want to buy property will depend on a few different factors, such as your price range, your ideal commute, whether or not you have kids who need to attend school, and any other personal preferences. An experienced real estate agent will take all of this into consideration when you contact them, and help you to find the ideal house based on your specifications.

A REALTOR CAN BE AN INVALUABLE RESOURCE DURING RELOCATION

Besides providing a number of valuable realtor services, a real estate agent can also act as a general guide for your new city! Want to know more about the schools, or where are fun places to take your kids? They’ll happily point out family friendly areas. If you’re moving without a family or are single, they’ll be able to point out a number of great restaurants and recommend different ways to pass the time. Los Angeles is one of the most exciting cities in the country, and there is a lot to take advantage of, from the bustling entertainment scene, to the beautiful beaches, and so much more.


MAKE YOUR LOS ANGELES RELOCATION A BREEZE WITH A REAL ESTATE AGENT

Regardless of your situation, we know that moving can seem overwhelming. However, an experienced real estate agent will take you through the whole process, and answer any questions you might have while helping to find your next dream home in sunny Los Angeles.

When recently asked by DIGS Magazine what we have seen as the latest trends in the South Bay market and how things have shifted in recent years, we reported that we believe that two major contributing factors have impacted our area in the past few years: lifestyle and education. The quality of life in the South Bay and the outstanding performance of the public schools here have made this area one of the most attractive places to live in the U.S.  People enjoy the close knit neighborhood feel while being conveniently located within a short distance to major commerce and industry in the nearby metropolitan area of Los Angeles. This continues to draw new residents from key markets across the nation. The increase demand and the strength of the annual average household income in the area have both had a profound impact on local real estate values. 

Some of the first questions we encounter when working with new buyers from out of the area is, “Where can I find information on Manhattan Beach Schools?” and  “How are the schools in the area?” This particular post will focus on Robinson Elementary School by taking a closer look at the neighborhoods the school offers as well as the programs that make the school stand out. We also have similar posts on Grandview Elementary and Mira Costa High School to help get to know these schools more closely. This elementary school, the smallest of the five elementary schools within the Manhattan Beach Unified School District holds a special place in our family as Jennifer Caskey, who was born and raised here in Manhattan Beach, attended Robinson; the three Caskey boys all attended the school as well.

Jennifer Caskey points out the tile made by one of her three sons who attended Robinson Elementary School.

Jennifer Caskey points out the tile made by one of her three sons who attended Robinson Elementary School.

Parents are very involved in school programs from high PTA participation to volunteering in the classroom, , and the staff works very closely with parents on a regular basis. The “Tuesday Tide” is a weekly newsletter that supports effective communication between the classroom and home. Students also enjoy the very popular Halloween Parade, Book Fair and Spring Talent Show program. Like it’s sister school, Grandview Elementary (also located in the Sand Section), Robinson Elementary also offers a Walking School Bus program as well as other enriching programs.

Because our public schools are so sought after, homes in this area are in high demand, and this is only one of the reasons why Manhattan Beach real estate is such a great investment.

A NATIONALLY TOP RANKED PUBLIC HIGH SCHOOL

Mira Costa High School was established in 1950 and serves both Manhattan Beach and Hermosa Beach students. (Hermosa Beach students have the option of attending Mira Costa High School or nearby rival, Redondo Union High School). The school services grades 9 through 12 and has an average enrollment of 2,500 students, with a teaching and administrative staff of about 110. 

The school is located in East Manhattan Beach; this is the real estate area East of Sepulveda Boulevard known as MLS area 147, “Manhattan Beach Mira Costa”. Homes here are very popular with growing families as they typically sit on 6,000-7,500 sf lots or larger, and offer a common floor plan adopted by various builders through the years that features 4 to 5 bedrooms at an average of 2,800 square feet or larger, and almost all homes have generous yard space—some even have pools. Homes in this area are about 1 mile from the beach, and are also very conveniently located to major commuter routes within the South Bay and beyond. Thanks to the ongoing efforts of the non-profit Manhattan Beach Education Foundation, which supports our local schools by raising much needed additional funding to preserve the standard of education in the District, the High School proudly offers one of the most comprehensive curriculum catalogs in the State of California. With over 20 AP programs, CIF championship level athletics programs, a STEM program that prepares students for careers in Science, Technology, Engineering and Math, as well as award winning music, drama and fine arts programs, Mira Costa offers a top-notch experience for all students in attendance. Over 95% of Mira Costa High graduates enter institutions of higher learning, many with scholarships to the Top 10 Universities in the nation. 

Not only is the school ranked in the Top 1% in the State, its API score typically ranks in the 900 range and Forbes Magazine has named the Manhattan Beach School District as the sixth overall district in the nation. Among earned accolades, the school has been recently named one of three Grammy Signature Schools Gold Recipients for excellence in music education programs.  The school boasts award winning Choral, Orchestral, and Drama programs, along with its championship level sports teams and its nationally recognized Model UN and Journalism programs. 

There are over 50 clubs and organizations on campus. Among some of the most successful athletics programs in the country, Mira Costa offers Football, Volleyball, Baseball, Softball, Basketball, Lacrosse, Water Polo, Swimming, Soccer, Cross Country and Track and Field teams. The Phys Ed department offers yoga courses, Surf PE, dance and weight training. The athletics department and physical education programs receive additional support of the MBX Foundation which funds hundreds of thousands of dollars in grant monies to important facility and equipment improvements and more. 

Integral to the school’s mission to maximize the unique potential of each student, the school’s advanced science programs offer labs in AP Bio, Chemistry, Earth and Space science, Environmental Science, Marine Science, Physics, and Physiology. Currently, there are 23 AP courses offered as well as expanded college prep classes in areas such as Film Noir, Women’s Literature, and Intro to Law. Computer Science and Robotics Programs are also part of Mira Costa’s expanded curriculum. The quality of education in our community provides a consistent demand for homes in the local market, which in turn helps to preserve home values and protect home equity. 

Mira Costa High School clearly offers an established and esteemed tradition of excellence to its Student Body which prepares them for a successful future, which is why real estate in Manhattan Beach is such an attractive draw for those moving into the area.   

MORE INFORMATION & RESOURCES Mira Costa PTSA MBX Foundation Manhattan Beach Ed Foundation (MBEF) Manhattan Beach Unified School District LaVista School Journalism Site Mira Costa Football Schedule Mira Costa Girls’ Volleyball Mira Costa Boys’ Volleyball Mira Costa Basketball

Hermosa: SP, adjective: (1) beautiful; (2) attractive; (3) lovely

This beach town just south of Manhattan Beach wasn’t named “Hermosa” by accident. Hermosa Beach boats beautiful beaches, a great downtown area, and award winning schools, but still has that small town charm. Its getting harder and harder to find a quaint little beach city near Los Angeles these days. Cities such as Santa Monica, Venice and even Manhattan Beach have seen growth in population, home sizes, retail and restaurants. There is another option, however, a little secret spot where you can still find that laid back beach environment…its Hermosa Beach.

Although Hermosa has that small town charm, you still can find amazing, gorgeous homes, and that’s what is found at 123 28th St. This house is spectacular, and the perfect DREAM home. With off the chart ocean views, gourmet kitchen, 4 bedrooms, including an expansive master suite, and entertaining space galore, you can live in luxury and still be a block away from the sand. This house is nestled in the NORTH Hermosa Beach sand section, and you don’t get a better location than this. A block from everything you need: the Strand, fun hometown bars, amazing restaurants, and a couple cute mom and pop groceries to boot. Want to watch a sports game? Take a short walk to the North End Bar and Grill – which happens to be the local hang out for many LA Kings Hockey players. Looking for a romantic dinner? The Bottle Inn is old school Italian, that has been around for decades.

And need a quick grocery trip? Nothing’s better than popping into the Green Store or Boccato’s Grocery…all just steps away from this location. Hermosa Beach is also home to award winning schools. Hermosa View and Hermosa Valley Elementary and Middle Schools provide the finest education. Your teens also can choose between Mira Costa High School or Redondo Union High School – both schools are top notch and the best in Southern California. This Hermosa Beach home has EVERYTHING you ever wanted…and more. 

Look for these key things in the market over the next 3-5 years:

a. Total volume in sales to increase dramatically

b. Price appreciation to be closer to 3-5%: closer to the inflation rate. Although the signs of an improving economy will be dampened by an increase in interest rates, demographic shifts are bringing strong demand to the area. Select, prime locations should see a much higher appreciation rate.

c. As the market stabilizes, the average days on market should trend back to its historical norm which would be 4-6 months for the South Bay area.

d. Supply will remain tighter in the more affordable ranges, making it important for buyers to be pre-approved with finances in order ready for strong offers in order to compete. Boomers are not moving as often as in previous years and generally, those are the homes most sought after by young families, thereby keeping inventory low and that built up demand urging pricing.

e. While 62% of homes in California saw multiple offers in 2016, the number of offers a home is expected to receive is likely to decrease as the market settles into “the new normal”. Homes closer to the average affordability index should still see multiple offers as this is the largest gap in available inventory and where the pent up demand will most readily show itself. Homes priced right, in excellent showing condition and in top rated school districts are still expected to see a great buyer response.

1. An improving economy will create more buyer demand. The U.S. Economic Outlook projects a 2.2% increase in the GDP with individuals in California expecting to see a 3.5% gain in real disposable income.

2. A national energy policy to provide lower cost fuel which will further boost the economy and American companies’ ability to compete internationally. This should result in even more demand for housing.

3. FED credit regulations should ease, making it easier for qualified borrowers to obtain financing and in turn causing the pendulum to start to swing the other way. The government’s over reaction to lending standards has created a credit crunch. If lending standards ease to common sense levels, the market will react positively.

4. Many “baby boomers” are nearing the age of retirement and may be selling their current homes and looking at other options.

5. First time buyers, many of whom were on the sidelines the past few years, most likely will beat their historic average of being 40% of the market.

Four things motivating local buyers to act in 2017

In addition to traditional market demand, there are several key market forces at play:

  1. Massive pent up demand(Locally in the Manhattan Beach and Hermosa Beach Market).

There is a wave of activity on the horizon in 2017.

The lack of inventory is holding back market volume, not pricing. For most of the past four years, any time a great home hit the market, there were multiple offers and typically several all cash offers. This made it impossible for buyers who need to sell their current home to be competitive. Due to the huge annual appreciation, many owners opted to delay their selling plans to be able to enjoy the appreciation. As the huge annual appreciation we have experienced over the last four years has been tamped down to a flicker from a flame, more and more owners will take this opportunity to liquidate real estate. This will allow a lot of move up buyers to get into the game. Buyers that need to sell their home to buy their next property will bring more inventory to the market which in turn will spur even more sales.

In the past 9 months, the market seems to have slowed down. While the average time on market dramatically increased, the amount of inventory actually shrank. It is the lack of quality listings that has really slowed the market.

My forecast for 2017 will be that as more listings come on the market, it will spur more buyers who need to sell their current home first, to list their homes for sale.  This will create more inventory and more options for the move-up buyer. One of the byproducts of the new normal will be a rather healthy trend in inventory rebalancing.  So while the MSI (or months’ supply of inventory), may still remain tilted towards sellers, it would be surprising to see less than 60 days’ supply on hand.

  1. Fear of rising interest rates

Many of the buyers who have been waiting out the election uncertainty will be motivated to make a move soon in order to take advantage of the still low interest rates before they start trending upwards. The FED’s publicly stated intention to increase rates will be buoyed by the strength of the stock market. As the stock market takes off, bond pricing will be affected.

  1. A robust economy 

A strengthening economy will lead to a buyer’s ability to take some profit out of the stock market and put that profit into investments that are better hedges against future inflation – such as real estate. This is especially true for the demographic in the South Bay. The economic factors that are drawing more and more companies into our Silicon Beach economy will give an overall boost to the area. This will lead to more cash being drawn into local real estate.

  1. The promise of lower tax rates

Should lower tax rates come into effect, more money will fall into the hands of the public. Overall, the local real estate market should continue to stabilize. The dramatic price increases have slowed, bringing ease to the fears of another housing bubble. This will continue to bring normalcy back to the market and will encourage consistent movement in real estate.

 

The lack of inventory is holding back market volume, not pricing. For most of the past four years, any time a great home hit the market, there were multiple offers and typically several all cash offers. This made it impossible for buyers who need to sell their current home to be competitive. Due to the huge annual appreciation, many owners opted to delay their selling plans to be able to enjoy the appreciation. As the huge annual appreciation we have experienced over the last four years has been tamped down to a flicker from a flame, more and more owners will take this opportunity to liquidate real estate. This will allow a lot of move up buyers to get into the game. Buyers that need to sell their home to buy their next property will bring more inventory to the market which in turn will spur even more sales.

In the past 9 months, the market seems to have slowed down. While the average time on market dramatically increased, the amount of inventory actually shrank. It is the lack of quality listings that has really slowed the market.

At times, up to 80% of local purchases are made by buyers who live in the immediate area. Buyers who a looking for more space, bigger bedrooms, a location closer to the beach or just trying to get into a better school district. There are buyers who have decided it is better to move up than remodel, buyers who now need a bigger home with a yard for the kids, or empty nesters who now can afford moving closer to the beach while downsizing the home. Due to the extremely high housing prices at the beach, the average South Bay home owner moves every 4-6 years.  Steady job growth and public school performance here in the South Bay continues to drive demand across all price points.

Generally speaking, the closer a property is to the water, there we will see the most stability in housing values.  Although the signs of an improving economy will be damped by an increase in interest rates, demographic shifts are bringing strong demand to the area and that consistency in the local markets. The affordability factor of Los Angeles County alone has seen mass migrations of average and first time home buyers moving out of LA towards the Inland Empire, Orange County, San Diego and Ventura. South Bay homes will continue to increase in value as jobs that support the affordability range in our area continue to flow into the expanding industries that surround the Beach Cities and Palos Verdes.

Our forecast for 2017 will be that as more listings come on the market, it will spur more buyers who need to sell their current home first, to list their homes for sale.  This will create more inventory and more options for the move-up buyer.

Starting in 2017, what we’ll most likely see is a unique alignment of economic and market forces with jobs and wage growth, low oil prices, and low interest rates. With the California economy outperforming the rest of the nation, California’s housing market is in a better position than most other states. Those in the Beach Cities are in a better position than most other cities in the State. 2017 should bring a modest increase in pricing with a growth in sales activity. This equates to more money in consumer’s pockets and higher confidence in spending. The housing market will enter an expansion phase nationally and a wave of new construction will slowly replace the aging housing stock locally.

It is interesting to note as we look back on our market forecast for 2016, how our analysis ended up when compared against actual market performance for the year. Read our 2016 forecast and breakdown here

The New Normal

As we move out of the housing recovery mode into a more stable period, many economists are referring to these market conditions as “the new normal”.Most likely, while we will still see prices increase, it will not be at the pace of the past 18 months but will be more moderated in the 4-5% range. Of course, considering the average price of homes in the South Bay, that still means some nice price gains. The high end is projected to turn over at a discretionary rate, while in the moderate price range, demand should continue unabated. Economists are also predicting that prices will rise faster than overall incomes. So if you are thinking of buying, there’s really no reason to wait. 2017 Market Predictions: the buyer perspective

One of the byproducts of “the new normal” will be a rather healthy trend in inventory rebalancing.  So while the MSI or months’ supply of inventory, may still remain tilted towards sellers, it would be surprising to see less than 30 days’ supply on hand as we have previously at a few junctures.

According to The Conference Board, national consumer confidence is at a 9 year high with jobs in California growing faster than anywhere else in the nation, with reported job gains being the highest in the Southern California region. Sustained job growth within the tech and engineering firms in Silicon Beach, the Downtown financial district and the entertainment and sports industries will continue to attract buyers to the South Bay due to the quality of both lifestyle and education. In turn, the market stability we projected in early 2016 should continue the trend, thereby avoiding an unhealthy “bubble”.

In summary, 2017 should see the following:

  • Pent up demand for inventory
  • Increase in unit sales
  • An almost overwhelming need for new construction
  • Local industry growth leading demand
  • Moderate, steady appreciation
  • Lack of affordability in the average price points as a continued challenge
  • Changing interest rates as an almost daily topic
  • Economists keeping a close watch on global markets

Manhattan Beach/Hermosa Beach micro-market forecast for 2017:

There is a wave of activity on the horizon in 2017.

The lack of inventory is holding back market volume, not pricing. For most of the past four years, any time a great home hit the market, there were multiple offers and typically several all cash offers. This made it impossible for buyers who need to sell their current home to be competitive. Due to the huge annual appreciation, many owners opted to delay their selling plans to be able to enjoy the appreciation. As the huge annual appreciation we have experienced over the last four years has been tamped down to a flicker from a flame, more and more owners will take this opportunity to liquidate real estate. This will allow a lot of move up buyers to get into the game. Buyers that need to sell their home to buy their next property will bring more inventory to the market which in turn will spur even more sales.

 

In the past 9 months, the market seems to have slowed down. While the average time on market dramatically increased, the amount of inventory actually shrank. It is the lack of quality listings that has really slowed the market.

At times, up to 80% of local purchases are made by buyers who live in the immediate area. Buyers who a looking for more space, bigger bedrooms, a location closer to the beach or just trying to get into a better school district. There are buyers who have decided it is better to move up than remodel, buyers who now need a bigger home with a yard for the kids, or empty nesters who now can afford moving closer to the beach while downsizing the home. Due to the extremely high housing prices at the beach, the average South Bay home owner moves every 4-6 years.  Steady job growth and public school performance here in the South Bay continues to drive demand across all price points.

Generally speaking, the closer a property is to the water, there we will see the most stability in housing values.  Although the signs of an improving economy will be damped by an increase in interest rates, demographic shifts are bringing strong demand to the area and that consistency in the local markets. The affordability factor of Los Angeles County alone has seen mass migrations of average and first time home buyers moving out of LA towards the Inland Empire, Orange County, San Diego and Ventura. South Bay homes will continue to increase in value as jobs that support the affordability range in our area continue to flow into the expanding industries that surround the Beach Cities and Palos Verdes.

My forecast for 2017 will be that as more listings come on the market, it will spur more buyers who need to sell their current home first, to list their homes for sale.  This will create more inventory and more options for the move-up buyer.

Long Term Predictions Overall

Look for these key things in over the next 3-5 years:

    1. Total volume in sales to increase dramatically
    2. Price appreciation to be closer to 3-5%: closer to the inflation rate. Although the signs of an improving economy will be dampened by an increase in interest rates, demographic shifts are bringing strong demand to the area. Select, prime locations should see a much higher appreciation rate.
    3. As the market stabilizes, the average days on market should trend back to its historical norm which would be 4-6 months for the South Bay area.
    4. Supply will remain tighter in the more affordable ranges, making it important for buyers to be pre-approved with finances in order ready for strong offers in order to compete. Boomers are not moving as often as in previous years and generally, those are the homes most sought after by young families, thereby keeping inventory low and that built up demand urging pricing.
    5. While 62% of homes in California saw multiple offers in 2016, the number of offers a home is expected to receive is likely to decrease as the market settles into “the new normal”. Homes closer to the average affordability index should still see multiple offers as this is the largest gap in available inventory and where the pent up demand will most readily show itself. Homes priced right, in excellent showing condition and in top rated school districts are still expected to see a great buyer response.

Factors that will help support the housing market over the next four years

  1. An improving economy will create more buyer demand. The U.S. Economic Outlook projects a 2.2% increase in the GDP with individuals in California expecting to see a 3.5% gain in real disposable income.
  2. A national energy policy to provide lower cost fuel which will further boost the economy and American companies’ ability to compete internationally. This should result in even more demand for housing.
  3. FED credit regulations should ease, making it easier for qualified borrowers to obtain financing and in turn causing the pendulum to start to swing the other way. The government’s over reaction to lending standards has created a credit crunch. If lending standards ease to common sense levels, the market will react positively.
  4. Many “baby boomers” are nearing the age of retirement and may be selling their current homes and looking at other options.
  5. First time buyers, many of whom were on the sidelines the past few years, most likely will beat their historic average of being 40% of the market

Sometimes there isn’t much control over the timing of when you need to sell your home. Jobs change, events happen, and life takes over.  If you are considering selling your home over the holidays, Caskey & Caskey will offer some important information on how to successfully sell your Manhattan Beach, Hermosa Beach or Redondo Beach property for maximum profit before the end of the year. 

Real Estate 


Holiday buyers can be the best buyers 

Year over year we have learned that though some may think the holidays are not a good time to sell because people are busy and distracted by Thanksgiving, Hanukka, Christmas and New Year’s, in reality the holidays actually couldn’t be a better time to sell. Anyone house hunting during the holiday season must have a good reason for doing so. Due to a decline in inventory (competition) over the holidays, you can still effectively sell your home without open houses. The serious buyers will have their agents closely at their sides ready to write an offer when the perfect home is found. Work with your agent to target buyers on a deadline, including people relocating for jobs in your area and investors on tax deadlines. Make sure your agent is highly invested in networking so they are aware of who is making moves and what active buyers in the community are serious about locking in before the year is over. 

Like Santa, your agent should be able to span the globe quickly to get the job done                                                                                

 An agent highly versed in the latest tech tools knows that family vacation plans don’t necessarily get in the way of doing what needs done, even when you are on the other side of the country visiting extended family. When interviewing your agent, be sure to ask what tools they use to remain in constant communication and if they have subscriptions to the latest electronic platforms in order to legally, securely and efficiently get an offer presented and accepted even if you are travelling. 

Make sure your agent’s holiday plans include working  to sell your home 

That means interviewing agents and finding out who won’t disappear during Thanksgiving, Christmas or New Year’s. Ask your friends and family if they can recommend a listing agent who will go above and beyond to get your home sold. Agents with teams are often very reliable over the holidays as they work together to make sure family time and work are both properly covered. This will ensure that you are not missing out on showings or offers because you can count on your agent to answer the phone, open the door, keep up on advertising and make sure some of the most motivated buyers of the year aren’t missing your home. 

Tis the season to sell – Decorate with your selling strategy in mind

The holidays can be so much fun especially since it is the one time of the year you can really go all out and transform your home with just about all design rules thrown to the wind, but if your home is on the market this season be careful not to overdo it on the decor. Adornments that are too large or too many can crowd your home and distract buyers. Also, it’s important to consider potentially offending buyers by decorating with religious themes and instead opt for general fall and winter decorations for this one year. 

Wrap it up with a great price 

No matter what time of year, a home that’s priced correctly for the market will make buyers feel merry. Rather than gradually making small price reductions over the season and lingering on the market, many experienced agents will advise sellers to closely examine the comps and develop a pricing strategy to attract the most buyers and obtain offers quickly in order to achieve the highest possible price. This also locks the home up into escrow so showings can slow down and the family can return to “normal” while working through the escrow process over the holidays instead of open houses and daily cleaning for optimal showings. 

Dress up nicely 

When autumn rolls around and the trees and shrubs start to lose their leaves and flowers, maintaining the exterior of your home becomes even more important. Bare trees equal a more exposed home, so touch up the paint, clean the gutters and spruce up the yard so it remains cheery and approachable during the winter months, especially with the California drought issue starting to impact green lawns and seasonal flowers in our area. 

Attract those online holiday shoppers 

When the weather outside is frightful, buyers are more likely than ever  to start their house hunt from the comfort of their homes by browsing new listings online. Make sure your agent has a track record for investing in professional, high-quality photos of your home so it shows in the best light. Holiday home buying

Get your home into their living room and onto their couch 

It’s true that over the holidays there is less foot traffic thanks to vacation and party plans and sometimes weather.  Hire an agent that includes a professional high definition video tour as part of their marketing plan for your home. YouTube is owned by the #1 search engine company in the world and agents who know how to manage great video content know how to make sure your home comes up in the most online searches. Your listing video may attract house hunters who don’t have time to physically see your home or those who would rather stay curled up on the couch under a blanket than go out in the rain. 

Offer a bit of cheer to visiting home buyers 

Rather than making buyers feel like they are imposing on you during the holidays, make them feel like welcome guests by making your home feel cozy and inviting during showing. Turn on the fire, play mellow, catchy holiday tunes in the background and leave an offering of holiday treats. Encouraging buyers to spend more time in your home gives them more time to see themselves creating their own holiday traditions in the home and mentally making it their own. 

If you are considering taking advantage of minimized competition and highly qualified, serious buyers in November, December and January, be sure to contact us direct at 310-374-1800 so we can develop a strategy that works for you and your family over the holidays. If you’d like to discuss the pros and cons of selling now or after the New Year, we are here to help you consider all options and make the best plan to realize your goals.

Big Tide Hitting the South Bay from Silicon Beach Expansion 

The local economy and housing market are sure to benefit from the rising tide of expansion in the area now know as “Silicon Beach”. Silicon Beach in is the Westside region of the greater Los Angeles metropolitan area generally centered around Playa Vista, and is home to over 500 tech start-up companies. By most accounts, this rapidly growing tech hub is the second largest in the world and has unlimited potential for growth. 

  It looks like the tech boom that hit LA is off and running. There is tremendous future growth potential as the tech industry evolves and becomes more integrated with other sectors such as entertainment, advertising, banking and virtually every other industry. More recently, Google’s major expansion plans with the purchase of 12 vacant acres in Playa Vista next to the historic hangar where Howard Hughes built the Spruce Goose. As Technology and Entertainment continue to merge and expand at a lightning pace, Playa Vista has emerged as a major hub. Facebook, Microsoft, Google, You Tube, and Yahoo are not alone in their expansion to this area as many other entrepreneurs are drawn to this new, vibrant community.  Engineers are being courted by the thousands as more media agencies, new start-up companies and established mega players converge. Silicon Beach is currently home to several start up incubators and a huge influx of funding. In 2013 over $500 million was raised for 94 new start-ups and 9 acquisitions. facebook, google, youtube, microsoft, yahoo 

The main impetus behind the rapid growth in LA’s tech sectors was the explosive merging of technology, with nearby Hollywood giving rise to a multitude of opportunities. Southern California undoubtedly possesses one of the most skilled local talent pools in the nation.  Playa Vista had the physical room for the corporations to nest together into this new hub of innovation while being adjacent to major freeways and major airports like LAX. These factors  greatly enhance the value to companies trying to attract the best talent to a large suburban area. This new trend will have a major impact on the Los Angeles area economy and with this new influx of investment, housing prices in the South Bay are surely to be directly affected. 

The South Bay will continue to be a strong draw to those considering advancement and new opportunities within the surge of business erupting in Silicon Beach. The proximity makes for a comfortable commute, award winning local schools provide top-notch public education for families, and the casual Southern California lifestyle is a huge draw for recreation and other past-times. Due to proximity, homes in the North End Sand Section, Tree Section, Manhattan Village and Liberty Village areas of Manhattan Beach, as well as North Redondo Beach, the Holly Glen/Del Aire sections of Hawthorne and homes in El Segundo are sure to be high on the interest list of those moving into the area riding the tide that’s hitting Silicon Beach. [metaslider id=5056] For more details, follow this link to a detailed article in the Los Angeles Times:  http://www.latimes.com/business/realestate/la-fi-playa-property-sale-20141203-story.html#page=1 Find out if your home is a good candidate for an incoming Silicon Beach home buyer by reaching out to a top real estate agent at Caskey and Caskey of Strand Hill Properties by connecting with us at info@caskeyandcaskey.com.

 For more information about Silicon Beach in LA, job postings, events, and more: SILICON BEACH LA — bringing together Entrepreneurs, Investors, Developers, Surfers, and all members of the “SiliconBeach” tech startup community SILICON BEACH FEST — LA’s original festival celebrating LA tech, entertainment & startups with panels, keynotes, workshops, mixers, and more SILICON BEACH ON FACEBOOK — Your Personal Tour Guide And The Home Of The LA Tech & Startup Community SILICON BEACH STARTUPS — Silicon Beach Start-ups ensures people within the local tech community stay connected, have the opportunity to showcase their products and get answers to their most pressing questions      

Should I Stay or Should I Go Now? 

 “Timing the Market” is a catch phrase commonly used by savvy real estate analysts, investors, and agents. Its what every seller and buyer strives to do: hit the market at the optimal time where the opportunity couldn’t be any better to get in or get out. In reality, guessing right once is a 50/50 proposition. The real estate market throughout the South Bay’s Beach Cities continues to ring in historic sales prices for local real estate making it very tempting for some to just capitalize on the current market conditions then make a move later. But the million dollar question is, once one sells, where does one go? If leaving the area is not an option, is it worth it to rent? Is it time to sell and rent? Let’s look at some pros and cons . . .   

Pros for Selling and Renting Well, the financial windfall is the obvious positive for selling now, with the state of the market as it is. While there may be a myriad of reasons why your property wouldn’t get top dollar in another market, in the current environment, many of those so-called negatives about your house can be dismissed. In a more “typical” market, negatives such as B- locations, smaller lots, and the need for updating can heavily affect buyer reaction to a property. A huge positive of our current market condition is that selling today gives you the ability to attract buyers that normally would have more “issue” with the negatives. Low inventory also means quick sales. Another positive for selling now is that homes are selling FAST. Some have been lucky enough to not even have to deal with several open houses, looky-loos, or scheduled showings, which many say can be the most stressful part about the selling process. In many cases a buyer may need to sell his/her house before buying their upleg, but current market conditions are seeing buyers’ homes selling quickly once on the market. This means there is less risk for houses sold with the contingency of the sale of the buyer’s current home. 

 On the Plus Side of Renting  First of all, you can wait to buy, take your time, and possibly see the market settle a bit.  Thereafter, you will be in the best position to purchase a home quickly because you have your finances ready to go. Having those finances ready to go also helps you appear as the stronger buyer if and when you enter a bidding war. Renting is also a way to test the waters. You can try out different areas of the South Bay and see what neighborhood best fits you and your family. Plus, it can be a nice break from home maintenance issues. In most cases the landlord takes care of landscaping, appliances that may fail, property insurance and the like. The landlord definitely takes care of the property taxes! Here’s an entertaining read on one ex-homeowner’s experience of renting vs. buying

 The Cost of Renting vs. Holding Let’s look at a very simplified example. Let’s say you purchased your current home for $1 million, and you are entertaining an offer from a buyer who is willing to pay you $2 million today. Let’s then assume you can walk away with $1 million. If you can then rent a home for $7,000 a month for one year that amounts to $84,000; in comparison, you would have paid $36,000 in mortgage payments on your home for that same year. You are looking at spending possibly $48,000 of your $1 million in gains to rent leaving you with plenty to spend on a down payment down the line. Of course this is a VERY simplified scenario . . . but $1 million in profit from your home gives you a lot of options in the long run. Try this engaging set of calculators set up to help you determine if renting or buying is a better option for you right now.   

The Other Side of Selling Then Renting The process of selling your home can be daunting. It can be hard to predict if it’s the right thing for you and your family. First, are you ready to give up this property that has become your home? There may be a lot of emotional attachment to a home. You may be settled, like your neighborhood, and all your furniture fits. Second, you may be really comfortable with the mortgage payment and/or tax base you currently have, which, in many cases, is less than some rents in this area. Third, you have children that you would like to have stay in a specific school district or zone that is based on where you live. There is no guarantee that you will find a suitable rental in the same school district, and many landlords do not accept pets; those that do may charge hefty pet deposits. These are all negatives that somewhat play on your emotions; nevertheless they are very real things to consider. What about the market? Will it really ever settle down? Will you be able to “get back in” and find another home to buy at some point? Again this is hard to predict. What we do know is that mortgage rates will likely go up in the future, and as a natural consequence, home prices should balance out. The real estate market is notorious for being cyclical, and therefore, there should always be a dip in home prices, however statistics are not absolutes, so there is always risk to consider. Reader’s Digest published 5 Hidden Costs of Renting which is a good, quick read on the subject. Timing always comes down to what is right for you, and that timing could be very different for you, your neighbors or your friends. The best way to go through these pros and cons is with a professional. Ask us to evaluate your home and help you to weigh all the positives and negatives of selling and renting.      

The Importance of Your Agent’s Pre-Market Plan for Your Property 

When considering selling, research tells us you will most likely begin your search for an agent on the internet. In doing so, you will most likely come across similar advice in many subjects from different agents. One of the most common things you will hear is an urging to pay attention to the showing condition of your home. The DIYers may take this advice and start sprucing up the front yard; adding flowers, trimming back overgrown trees, etc. Some will turn their attention inside; deep cleaning the home, jamming closets and the garage full of clutter to deal with later, cleaning the carpets and windows and more. 

A practice that has become almost code for many top producing agents is to hire a professional stager. The stager can act in many capacities; some will come and provide a lengthy list of “to-do” items and leave the homeowners with the list and a deadline. This is often the least costly way of incorporating a stager. Many agents offer to pay for this consultation service as part of their marketing plan for your home. (Always ask your agent, if they are suggesting staging, who is paying for what.) Other stagers can come in, roll up sleeves, and get down to helping you move furniture around, remove family photos, de-clutter and add color; some will even shop for accessories for you. Most commonly, stagers have crews at the ready to move heavy items, paint, pack and more. All of this comes at a cost, of course, but the return is well worth it. Statistics show that staged homes sell faster and for more money than homes that were not prepared in advance for marketing. Staging is one thing that works for certain and is highly recommended. But what do you do with a home that was tenant occupied for years by occupants that did not care for it as if it were their own? 

The time has come to consider selling because the market is proving some great equity returns and you want to maximize your profits; you are left staring at an overwhelming project and aren’t sure where to start. You start interviewing agents and asking for market comparables to establish your value. Everything that is presented to you is coming in under what you had hoped for. You have to decide to rent again or sell, but either way there is work to be done in order to get the most money out of the investment. What is your strategy?? Let’s look at a recent case study here in Manhattan Beach: a Manhattan Beach top agent helped a seller maximize equity in a tough case study which resulted in a Cinderella story. 

The subject property was vacated by long-term tenants and left in terrible condition. There was writing on the walls, badly stained carpets, staining on the walls & ceilings, old, sticky kitchen cabinets, holes in the walls, dead/brown landscape, wood damage and more to deal with. To sell this house, as-is, was a definite possibility. Most likely a builder would offer to pay lot value and scrape the lot for a new build, or an investor would offer to pick it up at a value and then do the work and flip it. To re-rent this house for top dollar and attract a higher end renter, there was still much work to be done. The owner wanted to maximize their equity in the home but was faced with a daunting task. 

By hiring a seasoned, experienced market specialist, the agent went right to work for him. Armed with a vast network of qualified and cost-effective vendors, the agent’s team went to work establishing a game plan that would attract the most buyers while also spending as little as possible on the rehabilitation of the home. The agent helped the seller determine where to spend and where to save. Quickly gathering estimates, working with a rehabilitation designer/project manager, and establishing a working timeline, the agent and his team set about transforming the property into an attractive starter home for re-sale. 

One of the major decisions was whether or not to go through the home and “iron-out” the kinks or leave it as is and just to corrective cosmetic work. The older tract homes, typically built in the 1940’s or 50’s, started with a typical 3 bedroom, 2 bath floorplan with about 1100 sf in the original footprint. Smaller galley kitchens were common, and larger yards were found than what is available in newer homes today. As families grew and changed over the years, many of these homes were remodeled, added on to, and altered (some not permitted) and this began to create what was functional living space 30 years ago, into what is now “odd” configurations for the wants and needs of today’s family. 

This home in particular had the benefit of an add-on that was done in the 1970’s which created a large, spacious family room. It was added on to the back of the home, so it took away the back wall of one of the original bedrooms; it also absorbed the window wall of the family bathroom, which had been glass bricks. The addition also created another bedroom that was accessed by way of the new family room. There was a large closet in the new family room that actually passed through to the new bedroom closet by way of adjoining space. Needless to say, this was odd. Also, a great deal of the yard area was absorbed by the new family room, reducing the outdoor space. Other quirks were an electrical switch to the exhaust fan in a bathroom being located in the hallway; a tiny closet door in the master bedroom that banged into the door to the master bathroom; a large hole in a master bedroom wall where the tenants had cut into the drywall to create a shelf for their large TV; an orphaned closet door what was the 3rd bedroom, but what became the “den” that passed through to the new family room, and a quirky laundry space in the kitchen. 

 The pluses were that the home had both formal and family spaces, a newer roof, limited termite damage, and the structure was sound. The addition expanded the house to a 1700+ sf footprint and it was located in a desirable neighborhood near outstanding schools. Working with the project manager and the agent, the owner was able to determine some important changes to the home that would help make sense of the floorplan by “smoothing it out”. The changes, the agent explained, would help a buyer mentally add value rather than detract from it as they walked through the home. Instead of looking at what needed to be done to make the home work for a young family and mentally calculating the costs of what would need to be done to the home after purchase, buyers would be able to walk through the home and agree that this home could work for them for many years before any additional funds would need to be put into it, thus maximizing the potential profit on the property for the seller. 

In about six weeks time, the home received brand new interior and exterior paint and brand new landscaping; all the hardwood floors were re-surfaced and re-stained and came out beautifully, new tile was laid over the floors in the kitchen; the low ceiling in the kitchen was opened up, creating height and space; the doors to the laundry area were removed, a butcher’s block folding shelf installed and the area opened up to create more depth to the kitchen; new hardware, fixtures and appliances were installed. The strange glass blocks in the family room (from the back wall of the bathroom) were removed and the area patched in. A medicine cabinet was installed where the glass blocks once were.

Old Kitchen/Laundry area

Old Kitchen/Laundry area

New kitchen/laundry area

New kitchen/laundry area

In the living room, the dated solid oak around the brick fireplace was painted a crisp white, while a ceiling fan was removed from the small dining area and was replaced with a new, modern chandelier. Old speakers in the ceiling were patched over, and new trim was installed in the dated recessed lighting. An electrician came through and tested out all the outlets and switches, then removed obsolete switches to clean up the circuits and make sense of the switches throughout the house. The weird switch in the hallway was moved into the bathroom where it belonged.     

The 3rd bedroom that once was, became a proper den, by walling up the closet in that room and giving the space to the master bedroom on the other side of that shared wall. By absorbing that little closet, it was possible to create a new large closet in the master; the tiny door near the bathroom became a set of sliding doors to the new closet and a second set of sliding doors was added at the other end for easy access. The area between was pre-wired for a future wall mount TV. This then gave 2 closets—a “his” and “hers” closet in the proper master bedroom. A utility closet on the outside of the home was absorbed and allowed the newer 3rd bedroom off the family room to be expanded. The two closets on that end of the house were separated and proper space was created. In addition, all bedrooms received brand new ceiling fans, as this is a great draw in the summer months in older homes. The agent also assisted in communications with neighbors to each side and helped negotiate for a new addition to an existing fence to detract from neighboring views. 

Finally, the end product resulted in a clean, fresh home loaded with original charm, that would function very well for an entry level buyer for many years. The home sold with multiple offers and established a new record for similar homes in the area, closing at over $1 million. It wasn’t staged and it wasn’t flipped. It was considered for the seller’s end game and a broad cross section of buyer’s needs. You’ll note that once complete, the seller did not stage the home, that’s because the issues that staging normally helps a buyer gets past were answered in the rehab project results. So, one might say the rehab was the staging perhaps . . . If this home had been truly “flipped” about another $30k to $50k would have gone into it, with deep updates to the kitchen, baths, windows, heating and more. So it wasn’t really either one, and that was a collective decision between the seller and the agent.  

Had the owners sold it “as-is”, the market price would have been between $920,000 and $940,000. By spending appx. $25,000 to make the corrections to the property, the home sold at $1,010,000, netting the sellers an additional $45,000 (at least). Had the agent recommended a sale in “as-is” condition, the sellers might have only broken even on their original investment. With the correct guidance, teamwork and plan in place, this home was instead a true Cinderella story. This is an extreme case, but an important one, because not everyone wants to sell to a builder, and there are plenty of entry level buyers in the Beach Cities looking for homes like this one and don’t want to/can’t pay a premium for a flip. 

A great agent will know what the hot points are for buyers and what the work-arounds are in order to bring a property around to its best performance level . They will have a trusted team of vendors at hand to employ and coordinate in order to achieve a timely result in a cost-conscious manner. They will know when it’s appropriate to employ a stager and when the job might be bigger than that. They will have your best interests at heart, will be committed to your real estate goals, and will help prepare your property for market, regardless of the size of the job. 

When beginning your search for your agent, make sure to have a lengthy discussion about their pre-market practices, the experience of their vendor network, how much they can assist in the process up-front, and be sure to get referrals from past clients if you can. There are many, many things to consider when selecting the agent to work for you, but pre-market preparation planning is one of the most important, especially in a fast-paced,competitive real estate market like the one here in Manhattan Beach. [Disclaimer: The Caskey & Caskey Team listed & sold this property in Manhattan Beach, CA in Fall of 2014] To discuss our pre-market strategy, please call Dave direct at 310-374-1800 or drop him a line by emailing info@caskeyandcaskey.com.

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