Why Is Inventory So Low in the San Fernando Valley?

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Today I want to address a major issues affecting our entire real estate market in Southern California and the nation as a whole. Why aren’t there enough homes available?

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Low inventory has become a nationwide trend.

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We have mentioned many times that for a neutral market in the SFV, we need at least 7,000 homes available for sale. We currently have a total of 2,400 homes, and it has been this way since December. There are a few reasons for this massive decline in inventory.

1. Interest rates are incredibly low, and they are still under 4%. Buyers have taken advantage of this and have bought up many homes.
2. Small time investors and institutional investors are also gobbling up homes right now. This inventory is being rented out and they’re making a lot of money, so it simply doesn’t make sense for them to sell these properties.
3. We have a sustained low interest rate environment. This means that many people have refinanced or locked in ultra low rates. This means that it is unlikely for these homes to come onto the market anytime soon.
4. There aren’t a lot of places for the move up-buyer or for the downsizing buyer to move. This means that they’re staying in their current homes until the market improves for buyers.
5. The recession has caused a lot of stunted development over the past few years. Not as many new homes have been built, and this has put pressure on our inventory levels.
6. Population growth and job growth in Southern California have increased the amount of people who need housing, and this is putting extra stress on the availability of homes.

The supply of homes in the entire United States is 8.6% below what it was last year. This has also caused home values to increase by 4.2%. Low inventory and high demand will inevitably push prices higher in Southern California.

If you need help navigating this difficult market, then you know who to turn to for help!

After Three Years of Searching, I Found Their Dream Home

“These buyers have been clients of mine for three years. We looked at over 60 homes until we finally found their dream property. I was always available to them to answer all of their questions. Even though it took awhile, I never gave up on them and now they are living in their dream home!

I also sold this family’s home in seven days for $23,000 over asking price. They were pleased with this wonderful results and want to recommend my team and I to all their friends and family!” - Scott

What You Need to Know About Earthquake Insurance in Porter Ranch

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Today we are happy to be joined by Zachary Schneiderman of Schneiderman Insurance, who is here to talk to us today about some of the common myths and misconceptions of earthquake insurance. As we all know, we live in earthquake country, and in light of all the recent earthquakes we’ve seen over the past few weeks, we thought this would be a good topic to discuss.

There is a lot of misinformation out there when it comes to earthquake insurance, but it’s an important item to have if you’re a homeowner in the area. If you don’t carry earthquake insurance and your house is affected, you are going to be responsible for 100% of the costs, and may even have to take a loan out from FEMA.

Now, if you have a 10-15% deductible that earthquake insurance typically has, that’s all you will have to borrow. When you’re looking at making a loan payment after an earthquake, it’s a lot better to only have to pay 10-15% back over time than 100%. If you can afford it, it makes a lot of sense to have.

One thing that’s important to note is the recent changes that have come to the California Earthquake Authority. This organization started after the 1994 earthquake, but they haven’t made a lot of changes to their coverages and options since then. In addition to the 10% and 15% deductible options they had in the past, they have added 5%, 20%, and even 25% deductibles as well.  Another thing they did was raise their limits. In 1994, $25,000 in loss of use coverage was a lot, but not so much anymore. Their loss of use coverage goes all the way up to $200,000 today.

Another important thing to note is that if you have certain items like a pool house or detached garage, the California Earthquake Authority does not cover that and you’ll need to get coverage from an outside company.

Thank you to Zachary for joining us today. If you have any questions for him, feel free to give him a call at (818)322-4744. If you have any other questions for us, we are always available to chat via phone or email. We look forward to hearing from you!