What Happened in the 2017 Real Estate Market?

What can you expect from the 2018 real estate market? Let’s take a look at the 2017 market recap and see which market trends may continue this year.

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It’s time to recap what happened in the 2017 real estate market. I also have a forecast of what you might be able to expect in 2018 for Porter Ranch and the San Fernando Valley. 

2017 started off with very low inventory. There were only about 47 properties for sale out of 11,600 single-family units. We ended the year with slightly less inventory. That low inventory really fueled the market—not just here in Porter Ranch but all over Southern California. 

When you look at the inventory in 2017, it stayed very low the first half of the year. In June, as spring transitioned into summer, inventory doubled from what it was at the beginning of the year. Still, it just wasn’t enough to satisfy buyer demand. Even though inventory increased in the summer, that inventory got gobbled up. 

From the beginning of 2017 to the end of 2017, inventory decreased by 24% and the average price in San Fernando Valley went up 13% in most neighborhoods. 

In most neighborhoods, there is only two to two and a half months of inventory in most areas. As a result, most prices are going up. 

Low inventory really fueled the 2017 real estate market.

In order to have a healthy market, there need to be about 7,500 homes for sale in the San Fernando Valley. If you look at the total amount of inventory at the end of 2017, we only had about 1,700 homes for sale. That is down from the 2,200 homes for sale at the end of 2016. 

You can see more details about the 2017 real estate market in these charts. 

So, what can you expect in 2018? 

I think the 2018 market will be more of the same. There is very little inventory and economic growth in the San Fernando Valley as a whole economically. A lot of people are priced out of areas like the West Side, Pasadena, Glendale, and the South Side of the Valley. As a result, more people are moving up to the North Side of the Valley, where they can get more house for their dollar. Homes are moving quickly in this area because they are more affordable and there is a lot of competition. I predict that we will see about 5% to 9% growth in both neighborhoods. 

If interest rates go up, that could have an impact on our market. We’re also keeping an eye on how the new tax reform bill will impact real estate here in the San Fernando Valley. We’ll have more information about that in our next video. 

Do you want to know how much your home is worth in the 2018 market? You can get a free market evaluation here. 

As always, please don’t hesitate to reach out to me with any other real estate questions. I would be happy to help you!

How Does the California Pool Safety Act Impact Real Estate Transactions?

How does the California Pool Safety Act affect the home buying process? Keith Morgan from Property Inspection Consultants is here to help me explain.

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I hope you all had a happy holiday season. Today, I’m joined by Keith Morgan from Property Inspection Consultants to discuss the California Pool Safety Act and how it affects buyers and sellers. 

These changes were made on October 11, 2011, when Governor Brown signed Senate Bill 442 into law. This law modifies the business professionals code as it applies to the home inspection profession. 

At this point, any time a home inspector conducts an inspection of a single-family residence that has a pool on the property, that inspector has to identify a certain number of pool safety access provisions. It doesn’t matter whether the home inspector conducts an investigation of the pool in addition to the home inspection or not. A minimum of two safety items must be included on the home inspection report in order to pass the general home inspection. 

This law is in place to prevent as many child drowning deaths as possible.

Here are seven possible safety items that could be included in the home inspection report: 

1. An enclosure that isolates the swimming pool or spa from the private single-family home, i.e., a fence or wall. 
2. Removable mesh fencing. 
3. An approved safety pool cover that prevents someone from entering the water. These are not the same as pool heating covers, which offer no safety protection. 
4. Exit alarms on the private single-family home’s doors that provide direct access to the swimming pool or spa. A typical home security system does satisfy this requirement. 
5. A self-closing, self-latching device with a release mechanism placed no lower than 54 inches above the floor on the doors providing direct access to the swimming pool or spa. 
6. An alarm that, when placed in a swimming pool or spa, will sound upon detection of an accidental or unauthorized entrance into the water. 
7. Other means of protection verified by ASTM or the American Society of Mechanical Engineers (ASME). 

It is the inspector’s job to point out these items and let you know which safety features are available for the pool. 

If you are a homebuyer looking at properties with pools, make sure that you work with an inspector who is aware of and conversant with the new requirements. This law does not require you to make corrections or upgrades. You simply need to be aware of the pool’s safety features. 

At the end of the day, the California Pool Safety Act is there to prevent as many child-drowning deaths as possible. 

Thank you to Keith for stopping by today. If you have any questions for him, you can give him a call at (818) 363-6670.

As always, if you have any real estate questions, just give me a call or send me an email. I would be happy to help you!

Is It Better to Build or Buy?

When it comes to choosing between buying and building a home or between buying a new or resale home, there are a lot of variables to consider.

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Is it better to buy or build a house? Or is it better to buy a new or existing home?

One of the pros of building a house from scratch is that you’re allowed to pick out the details of the home, such as the floor plan and other certain amenities. 

Personally, however, I always think it’s a little more expensive to build a home, and I wouldn’t look forward to picking out the thousands of details necessary to build a house. These include all the building codes and regulations from the city that you have to deal with. 

More importantly, with all the recent natural disasters in Florida, Texas, and California, I believe that hiring people to build a home will be more expensive than normal. Due to the shortage of supplies created by these natural disasters, the cost of materials will be more expensive as well.

I wouldn’t look forward to picking out the thousands of details necessary to build a house.

When it comes to buying a new or existing home, buying new construction is like buying a new car because it’s a brand-new property. No one has ever lived in it before, and projects like landscaping will need to be done after the fact. If you can find a similar home that’s maybe three to 10 years old in a similar neighborhood, you’ll find that projects like that have been taken care of. 

When buying a brand-new property, landscaping can cost anywhere from $25,000 to $75,000. Adding upgrades to the home itself can also cost you thousands of dollars. If you buy a resale property, there’s a good chance those upgrades will already have been done. Because that resale home isn’t brand new, the list price will also be lower too.

There are a lot of variables to consider, so what’s best for you depends on what your specific needs are and what you’re willing to do and pay for. 

If you’re trying to weigh the options of each of these scenarios or you have any other real estate questions, feel free to give us a call or shoot us an email. Until then, have a happy new year and we look forward to seeing you again in 2018!