THE MARKET

NEWS

Mortgage Rates Drop as Stocks Take a Dive

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Earlier this week, mortgage rates moved to their lowest point this month. The drop happened as trade tensions remained in focus on the international stage. In general, the worse the US/China trade relationship is at any given moment, the better it has been for the bond market (and the worse it’s been for stocks). This is typical behavior for markets because stocks tend to benefit from growth and certainty while bonds tend to benefit when investors are uncertain, downbeat, or looking for safe havens to ride out volatility. As bonds “benefit” from that demand, prices rise and interest rates fall.
 
Monday’s precipitous stock market slide set a record for the biggest 1-day drop this year. The stock market’s continued excitability (and reactivity to Twitter) makes real estate a sound investment for stuffing retirement coffers. Los Angeles’ median price for a single-family home rose 2.1% in April to $597,500 (while year-over-year sales volume was off 15.5% due to lack of inventory). Also, rents are at an all-time high in L.A., making rental income property purchases more appealing as passive income generators.
 
Mortgage rates this week averaged 4.25% on a 30-year fixed Jumbo (up to $3,000,000) and 3.625% on a 7-year adjustable (up to $4,000,000).
 
In other news: L.A.’s high-end sales (over $15 million) continued to creep along with 5 single-family homes closing in April: 9362 Nightingale Drive ($15,720,000), 1707 Westridge Road ($19,500,000), 21 Oakmont Drive ($33,500,000), and 916 Oxford Way ($34,650,000). The highest condo sale of the month was 101 Ocean Avenue #B400 for $5,500,000.
 

Have you lost your waze?

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With Angelenos from Encino to Echo Park complaining of a rise in disruptive cut-through traffic on residential streets, Los Angeles officials are trying to secure new data-sharing agreements with companies like Waze and Google Maps. Earlier this week, the L.A. City Council directed the city’s transportation department to attempt to persuade digital mapping companies to participate in a pilot program that would limit the streets that drivers are instructed to use in a given area.
 
Under the terms of a pilot program, transportation planners could work with app developers to ensure drivers aren’t instructed to take streets designated as local thoroughfares, access roads, and small hillside arterials. Transportation staffers say it’s particularly important that drivers avoid these roads during special events, natural disasters, and school pickup hours.
 
At transportation committee meeting last month, Gallagher explained that, during peak hours when major corridors are clogged, mapping applications often divert drivers onto streets poorly equipped to handle high traffic volumes. On particularly narrow roads, this can create “standoff situations” or delay emergency vehicles.
 

Scandalous Behavior Bumps Housing Inventory

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Not since Bernie Madoff’s crash-and-burn has a national scandal affected Los Angeles’ local housing inventory like the current University coaching scandal. Back when Bernie took several rich L.A. clients’ fortunes down with him–including Mozza chef/owner Nancy Silverton’s, who was forced to sell her Hancock Park home fast and low–several luxury-level homes came on the market at suspiciously-low asking prices. “Why is this house such a deal?” asked one of my buyers in early 2009 about a Hollywood Hills charmer. The listing agent whispered, “Madoff,” which soon became an acceptable code word for an unfortunate distress sale.
 
Earlier this month, Jovan Vavic, the former USC men’s and women’s water polo coach who was fired in March amid fallout from the elaborate college admissions scandal, put his home in Ranchos Palos Verdes on the market for $2.499 million. Vavic, who led the Trojans’ water polo teams to a combined 16 national championships, was fired after being accused by prosecutors of receiving bribes totaling more than $250,000 to help parents take advantage of relaxed admissions standards for athletes at USC–even though their kids were not legitimate student athletes.
 
Built in 2008, Vavic’s Mediterranean-style house sits on a ridge with sweeping views of the ocean and Catalina Islands. Extensively remodeled, the 4BR/3.5BA house has about 3,200 sq.ft. of living space, and four fireplaces.
 
Also this month, Donna Heinel, the former USC senior associate athletic director who was also fired in March after being indicted in connection with the ongoing scandal, has listed her home in Long Beach for sale at $1.998 million. Like her colleague, Heinel was canned after being accused by prosecutors of receiving bribes totaling more than $1.3 million.
 
Heinel’s soon-to-be-former home sits in the LBC’s Naples Island neighborhood. It’s a 3-story Mediterranean which has been extensively updated and features distressed hardwood floors, contemporary fixtures, and a decorative gas fireplace.
 
Replacing “Madoff,” will the new real estate distress buzzword become Felicity “Huffman” (who plead guilty) or Lori “Loughlin” (who continues to fight accusations)?
 

How “tappable” is your home equity?

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With some of the nation’s highest median home prices—and more than a few of its priciest individual homes—Los Angeles property owners collectively possess a massive pool of real estate equity worth an astonishing $760 billion. That’s according to a new report from real estate analyst Black Knight. The study shows that L.A. leads the nation in “tappable” equity, that is, the value of homes that owners can access by selling or refinancing.
 
The amount of equity accessible to homeowners in our metropolitan area, which includes L.A. and Orange counties, is nearly double that of New York ($395 billion) and fully twice that of the entire state of Texas ($322 billion).
 
The numbers in the report highlight the financial resources available to area homeowners—particularly those who have paid off a sizable portion of their mortgages. That wealth can be accessed by selling, by using equity to take out loans, or through a cash-out refinance.
 

A Mid-century Juggernaut

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The Los Angeles Dodgers officially started their 2019 season yesterday (victorious over Arizona 12-5), and their home—Dodger Stadium—is the 3rd-oldest continually used stadium in the country. With a capacity of 56,000, Dodger Stadium is a picture-perfect setting for a ball game, and a time-honored way to experience one of our beloved city’s icons. The stadium can be seen from movie stars’ balconies in the Bird Streets, from Los Feliz Spanish Colonials, and is virtually in the back yards of some homes in Elysian Park (where Stadium proximity can pump-up home values).
 
A time-traveling visitor from the 1960s would recognize the structure’s clean mid-century modern lines, an architectural style that has come to define SoCal. Construction of the modernist stadium was one of the most ambitious projects ever undertaken by the City of L.A. The design, by Emil Praeger, called for terraced entrances, huge flying-saucer-shaped planters, acres of exposed concrete, and undulating aluminum shade structures above the outfield bleachers. Construction crews moved about 8 million cubic yards of earth to carve out the stadium’s foundation and flatten the surrounding terrain to create the venue’s massive, baseball-glove-shaped parking lot.
 
In 2013, a massive $100 million renovation modernized the venue with the addition of high-definition video screens and more powerful WiFi, but stayed true to the original colors and materials with new details like hand-painted way-finding signs. Also, the food has gotten better over the last few years. Instead of a classic Dodger Dog, try the Al pastor-seasoned sausage dog, topped with pineapple salsa and cilantro-lime crema ($12.50); available only in sections Field 10, Loge 133, and Reserve 4.
 
GO BLUE!
 

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