Highest apartment vacancy rate in 23-years

Not only has the current economy affected homeowners who can no longer afford their mortgages, in California it has also been a huge issue for Landlords and tenants. This week it was reported that apartment vacancies rose to the highest point in 23-years. This comes as a surprise to many professionals because a lot of landlords have been lowering rent, to make it more affordable for tenants to stay in their current units or to get new ones into the vacant units. Many of the vacancies sit for rent, for weeks, even months until a potential renter comes in to even consider it. The increase of vacancies has slowly been happening since about 2007.

It’s a chain reaction in this industry. Tenants are becoming unemployed, because employers can no longer afford to keep them, in turn having to forfeit their leases or negotiate less of a rent each month. When a landlord loses a tenant, the lose money. When a vacant unit just sits, that’s money out the door everyday, that they can be using toward the mortgage on the building. For investors (landlords) who hold income property, when they are able to occupy the vacant units, the landlords are most likely taking a lot less than market value or holding certain move-in specials, in some cases giving these units away for free, just to get them occupied.

Experts have said that vacancy rates have risen for the past 3 quarters since 2007 and are expected to raise to 8 percent by the fourth quarter of this year, not good news for landlords. It could be good news for the tenants who cannot afford high rental costs though. A lot of the experts have said that this could have been prevented, if landlords would have done their homework and lowered rents before the downfall occurred.

The fact that landlords are being forced to lower rent, is causing a lot of these buildings to go into default, then causing more financial trouble for the landlord. In most cases, these buildings and the income that comes from them, is the owners livelihood.

One bedroom and single apartments are being said to be sitting for the longest. Because of the increase in job loss, people can no longer afford to live alone and are being forced to get a roommate or move in with family. When speaking with a local On-Site manager, she mentioned that 2 one-bedroom apartments, that share common wall, had been sitting for months. Prospects were interested, but couldn’t rent the units because of the limit that is put on how many tenants can live in a one-bedroom, turning the prospective tenant away to find something else, that suits their needs. She had even suggested to the landlord to knock the wall out making it a two-bedroom, in turn making it more appealing and easier to rent in today’s market.

Experts have also said that until the current unemployment rate goes down drastically, that the vacancy rate will continue to be on the rise. Most do not see that happening in the near future. Without steady income, one cannot afford to rent.

Gov. Arnold Schwarzenegger approved seven new mortgage laws

AB 260 by Assemblyman Ted Lieu (D-Torrance). The measure, which takes effect Jan. 1, tightens restrictions on mortgage brokers so they cannot steer borrowers to riskier, higher-interest loans when they qualify for less-expensive ones.
* SB 36, by Sen. Ron Calderon (D-Montebello), sets licensing requirements for all residential loan originators.
* SB 239, by Sen. Fran Pavley (D-Agoura Hills), makes it a felony to commit fraud on a mortgage loan application.
* AB 329, by Assemblyman Mike Feuer (D-Los Angeles), requires lenders to give more and clearer information to those interested in reverse mortgages, which let seniors borrow against their homes' equity.
* SB 237, by Calderon, creates a registration program for appraisal management firms.* AB 957, by Assemblywoman Cathleen Galgiani (D-Stockton), allows buyers of foreclosed homes to choose local escrow officers, rather than being forced to use the escrow company chosen by the seller.
* AB 1160, by Assemblyman Paul Fong (D-Cupertino), requires that mortgage loan documents be written in the same language the verbal negotiations were conducted in.

NEW LISTING in South Redondo Beach, CA., 90277

For Sale: 805 N Juanita Ave. #B, Redondo Beach, CA 90277

$849,000

3 Br, 2.5 Baths, 2226 sf, Rear Unit

Large Kitchen, private back yard.

Call me: Jack McSweeney / 310 346-0391

DRE# 01027223

New Townhome listing coming...

Located in South Redondo Beach. It will go on the MLS on Monday, September 28th. Very nice two on a lot, rear unit.

Fed Holds Rates

The Federal Open Market Committee voted 10-0 to maintain the target federal-funds rate for interbank lending at a record-low range of zero to 0.25%. "Economic activity has picked up following its severe downturn," the Fed said in the upbeat policy statement it released at the conclusion of its two-day policy meeting.
(WSJ)

Tax Credit - You need to act now!

Real estate professionals report that first-time home buyers are flooding the sale market, pressed to finalize a deal before the federal government's $8,000 tax credit offer expires on Nov. 30.
Because mortgage approvals, residential inspections, and other steps in the buying process typically take about two months, buyers hoping to take advantage of the incentive will need to have a contract by the end of September.
The new flurry of activity now as house-hunters try to meet the deadline is triggering bidding wars and energizing the property market, which historically is slow at the end of summer. As a result, more homes are getting their full asking price.
-realtor.org

WSJ - Fed Suggests Economy Is Stabilizing

U.S. Federal Reserve officials on Wednesday left official interest rates near zero but suggested the economy is on more stable ground, more confirmation that the severe recession is either already over or will be very soon.

Palos Verdes Estates Luxury Ocean View home

1484 Via Coronel

Palos Verdes Estates, CA. 90274
This Ocean View home has been extensively remodeled.

5 Bedrooms + Office, 4.5 bath
4883 Sq.Ft, 15,000 Sq,Ft Lot
4 Par Garage, Black Bottom Pool
Formal Living Room, 2 Family Rooms

$2,900,000

Jack McSweeney
DRE#01027223
310 346-0391

Click the link for virtual tour and more pictures.

Great New Listing In North Redondo Beach

2506 Clark Lane, Redondo Beach, CA., 90278

FOR SALE:

Fabulous, Big, 2931 Sq.Ft Townhouse. It has 3 Bedrooms (the 4th was converted to the closet you deserve, off the Master) Loft and 3.5 Baths. All for $725,000

SOLD in 3 days!

The Flippers are coming back

It was only a matter of time. This week I got 3 separate calls from people looking for houses and when I asked what they wanted in their new homes, they all said "Oh, it's not for me personally, I want a real deal, put a few bucks into fixing and putting it right back on the market". The last time I heard that was in 2001. They're Back!
To me, this is a good indication that the real estate bottom is near. Interest rates are low. Investors are returning. There are real bargains to be had and the stock market is still too scary for most people. Where do they turn? REAL ESTATE.
The best barometer of all... My phone is ringing. http://sobaycalmls.com/

Buy or REFI now.

"The Fed said it will buy up to $300 billion in longer-term Treasurys and buy hundreds of billions of dollars more in mortgage-backed securities in an effort to aid the ailing economy. Coming into Wednesday many analysts argued that the Fed was unlikely to take such a bold step. The move thus shocked markets, causing an immediate rally in stocks and pushing bonds up dramatically within minutes of the announcement of the Fed's move."
"By buying Treasurys, the central bank is increasing the amount of money in the system in a similar fashion to reducing interest rates. The move could lead to lower mortgage rates and more favorable spreads for banks."
-WSJ

This could be the opportunity you have been waiting for because it looks like interest rates will be coming down even more very soon. You could see the conforming loan interest rate fall to 4% - 4.25% range from its current 4.75% - 5% range now. If you are thinking about buying or Refinancing your home, now is the time. Just my humble opinion.

New Listing in Torrance

WONDERFUL CURB APPEAL!
This beautiful single family / one level home is located at 22617 Greenwood Ave, Torrance, 90505.
It has 3 Bedrooms, 1 3/4 Baths and almost 1400 s.f..
It is in Move in condition and will not last long at $685,000

PROPERTY TAX REDUCTION SCAM ALERT

The Los Angeles County Assessor's office is alerting homeowners that various private companies are sending mailings to property owners offering their services to pursue a reduction in the owner's property taxes. The companies may charge hundreds of dollars to file for a reduction in value on behalf of the property owner. Some companies also are imposing late fees if the application is received after an arbitrary deadline. Solicitations from private companies offering to pursue a reduction in property taxes must clearly indicate that they are NOT a government agency and that their services are NOT approved or endorsed by any government agency. Failure to provide such notice is a violation of California law.In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a "decline-in-value." A decline-in-value occurs when the current market value of your property is less than the assessed value as of January 1. The assessed value is the value shown on a property owner's most recent property tax bill. Typically, an application from the property owner is required to initiate a review of the property's value by the Assessor.

The FIXER you have been waiting for!

Fabulous Ocean, Catalina and Trump Golf Club Views from this Rancho Palos Verdes Fixer. The price is $849,000 (not a misprint) for a quick sale. Heirs are not up to the work needed to bring this home up to date. This is the bargain you are looking for!

3924 Exultant Drive, Rancho Palos Verdes. Call for an appointment to see today. This will not last long.

SOLD IN 10 DAY'S!

Let's look at some Stats

As you can see on the graph, the number of unsold listings is coming down in the South Bay area of Los Angles. In July there was 957 listings vs 705 at the end of November. It will be interesting to see the December figures which will come out in Mid-January. What has happened? Interest rates have come down to historic lows and people who don't have to sell aren't selling. Then there are those that just want to get through the holidays. I would be interested in your comments. Happy New Year!