sandy beachSouth Bay News

The South Bay is a collection of 13 cities that offer a vibrant Southern California lifestyle along the coast.

There's always something to do that is fun, entertaining, healthy, and close by. We'll keep you updated on a variety of events going on in our community

July 3, 2020

Will new homes be available this year?

Leading experts are optimistic that the nation’s economic recovery is set to begin during the 3rd quarter of 2020. Their claims continue that the housing market is poised to lead the economy out of recession.

Builders have a renewed confidence about the demand for homes which means that new construction may play a large role in this effort to boost the economy. The National Association of Home Builders (NAHB) stated that new home sales (US) in May had a 17% gain over April..

There has been an increase in demand for single-family homes in suburban regions with lower-density populations, as a result of the pandemic crisis. Authorized building permits for new residential construction is on the rise, as are housing starts. The graph below indicates this increase.

While housing permits and starts are both considerably lower than they were one year ago, the new construction market is building its way back up which indicates trends are moving in the right direction. This is especially true for having an impact on economic recovery. Brand-new homes will also help narrow the gap for inventory at a time when home buyers are so eager to make a purchase.

With low interest rates and increase of mortgage applications, confidence in the market is rising. Builders are already receiving more online and telephone inquiries regarding new construction, according to the NAHB.

Tentative sellers may now possibly look forward to moving to a newly-built home designed to their liking – an option that was not so readily available one year ago. Now may be the time they finally take advantage of high buyer demand and, move to a new dream home of their own.

Posted in Market Updates
July 1, 2020

What Experts are Saying about Remainder of 2020

Now that 2020 has reached its midpoint, many are wondering what will happen to the real estate market in the months to come. 

Leading economists and financiers are actually revising their forecasts for the third and fourth quarters of this year, to be more optimistic which is extremely encouraging.

Regarding key areas that will fuel economic recovery, the experts recently made the following points.

Mortgage Purchase Applications: The recovery in housing is happening faster than expected. Rather than our original 2% decline in purchase originations, we now think there will be 2% growth this year.

- Joel Kan, Associate VP, Economic and Industry Forecasting, Mortgage Bankers Association

Homes Sales: Sales completed in May actually reflect contract signings in March and April – the lowest point of the pandemic cycle. Home sales will surely rise in the months to come and could even surpass one-year ago figures in the second half of 2020.

- Lawrence Yun, Chief Economist, National Association of Realtors (NAR)

Inventory: The next few months ought to see a slow-yet-steady improvement in new inventory, and we’ve projected a return to historical trend for the September through December time frame.

- George Ratiu, Senior Economist, realtor.com

Mortgage Rates: Going forward, we forecast the 30-year fixed rate mortgage to remain low, falling to a yearly average of 3.4% in 2020 and 3.2% in 2021.

- Freddie Mac

New Construction: The number of single-family permits has increased significantly, to the second-highest level since 2008. This suggests that a serious acceleration in new construction will likely occur.

- Doug Duncan, Chief Economist, Fannie Mae

Posted in Market Updates
June 30, 2020

New Index Reveals Impact of COVID on Real Estate

Realtor.com recently released their Housing Recovery Index, a weekly guide showing how the pandemic has impacted the housing market. It tracks the growth of four key components in the residential real estate industry:

  1. Housing demand –Online search activity
  2. Home Price – Asking prices
  3. Housing supply – New listings
  4. Pace of sales – Difference in time on-market

The last week of January 2020 market trend has been used as a baseline for pre-COVID market growth, and was set to 100 in this period; current status is compared accordingly. The higher a market’s index value, the higher its recovery and vice versa.

The graph below charts the course of what has happened since early 2020, throughout the pause of the economy beginning in March. It also shows the strength of the recovery since the beginning of May.

Just as economists have been forecasting for the past few weeks, the data today indicates that the housing market is already on its way up.

Per Dean Mon, Chairman of the National Association of Home Builders (NAHB), As the nation opens, housing is well-positioned to lead the economy forward.

Staying connected to the housing market’s performance over the coming months is crucial. Data and analysis will continue to indicate exactly how the market is doing during this unprecedented period and time ahead.

Posted in Market Updates
June 26, 2020

Economic Experts’ Take on Future Home Prices

Amid all of the uncertainty that has prevailed as a result of a worldwide pandemic and economic recession, predicting consumer behavior has become nearly impossible. (This is one thing that is certain.)

In turn, forecasting home prices has become extremely difficult, as the tried-and-true formulas of past forecasts are as good as obsolete. In even the recent past, it was possible to calculate supply vs. demand.

Right now, mortgage applications to buy a home rose to the highest level in 11 years, while inventory of homes for sale is nearly at an all-time low. This would typically equal strong appreciation for home values as 2020 continues to unfold. 

Some experts, however, are not certain about the sustainability of this current rush of buyer interest. It is perceived as an upswing caused by pent-up demand (from buyers coming out of shelter-in-place) and supply-in-progress (new construction) that has been delayed. It is believed that after this so-called pent-up demand diminishes, the true economic scars from the pandemic will show up more clearly to affect the housing market.

At this time, housing price depreciation/appreciation projections from experts of top financial and real estate groups actually yield a wide range - from a year-over-year decline of 1.5% to an increase of 4.0%. 

This data perhaps simply yields the following conclusions:

  1. There is no real consensus among the experts.
  2. No one is projecting prices to crash like they did in 2008.

It appears quite likely that home prices will not change dramatically this year, even with all of the uncertainty that is prevalent in 2020.

Posted in Market Updates
June 24, 2020

Why Home Buyers Want to Buy Sooner than Later

In a recent survey of over 1,000 prospective home buyers, 53% indicated that they are likely to buy a home within the year, even amid the current health crisis and its aftermath.

The three main three reasons buyers are looking to move sooner than later are shown in the graph here:

The following lends more insight into the buyer behavior revealed by the survey.

Understandably, the most favored reason (67%) prospective buyers are eager to purchase is current mortgage rates, which are hovering near all-time lows. Top economists are forecasting a solid recovery in home sales as the economy gradually rebounds, in which low mortgage rates are a key factor.

Consider the comparison of historic mortgage rates by decade (shown below).

Going forward, mortgage interest rates are expected to remain low, well into 2021.

Another reason (32%) buyers are eager to purchase a home at this hour, is because they have been able to save some extra money while sheltering-in-place these past few months. Many have minimized spending for commuting, social events, dining out, and more. In turn, the money saved can make purchasing a home more feasible, as down payments and closing costs now seem more affordable.

Still other prospective buyers (28%) – both renters and current homeowners - indicated that stay-at-home orders gave them a unique opportunity to truly evaluate their living space. Many are ready to make a change based on needs for more (or less) space, even a more spacious neighborhood. The time available to create a wish list has now inspired action to seek a more desirable home.

While buyers are ready and willing, the reality of the current market is that homes available for sale are scarce at best, which can equal competition for listings. It is recommended that buyers get pre-approved for financing, and partner with a trusted real estate professional. With both in place, it is all the more possible to act quickly when the perfect property calls them home. 

Sellers are encouraged to work with a trusted professional as well, who can guide the tasks of listing and showing their home confidently, with new safety protocols and guidelines. With buyer eagerness so high at the moment, chances are excellent that a quick, successful sale is inevitable.

Buying or selling, today is a great time to make a move. 

Posted in Market Updates
June 23, 2020

Summer is the New Spring for Real Estate

June 19, 2020

In the Community – Ongoing and coming up - June 19

With businesses only slowly reopening, most events are still only being offered virtually. In the meantime, here are a few suggestions for making time at/near home more enjoyable.

TOCA To Go, presented by the Torrance Cultural Arts Foundation - ongoing

Since we can't get to the theater, this unique program invites you to have a special performer/performance come to your home, business, or other location. It is the perfect choice for a memorable occasion, celebration, or special gift. Make selection and schedule time with further information here.    

Special Dog Walking Hours at South Coast Botanic Garden - ongoing

On second and fourth Wednesdays each month, dogs on leash are welcome to explore the Garden with their persons, from 5pm-8pm. Visit website to reserve and purchase tickets; reservations are required and best reserved early.  

Torrance Antique Street Faire - Sunday, 28 June, 8am - 3pm

This in-person, outdoor event welcomes those passionate about antiques and collectibles. Toys, vintage clothing and jewelry, tools, plants, even antique appraisals are all offered. 

Posted in South Bay Events
June 17, 2020

Real Estate Polled as Top American Investment, Again

An annual Gallup survey polls Americans to determine their choice of preferred long-term investment. Those surveyed are asked to select real estate, stocks/mutual funds, gold, savings accounts/CDs, or bonds.

Not all that surprisingly, Americans are not viewing stocks or mutual funds as their favorite at the moment, after U.S. markets dropped significantly with the recent pandemic crisis. Only 21% of respondents named stocks as a best investment which is the lowest Gallup has recorded since 2012.

For the seventh year running, real estate ranks first as Americans' most favored investment, for 35% or respondents.

Per Gallup:

“Real estate remains the most favored investment to Americans, as has been the case since 2013, when the housing market was on the rebound. More than a third of Americans have named real estate as the top investment since 2016.” 

Results of the Gallup poll are shown below.

Americans remain confident in the stability of housing as a long-term investment, even though the U.S. economy is facing challenges right now. Chances are this confidence will help weather the current storms and lead the way for economic recovery.

Posted in Market Updates
June 16, 2020

Recession? Yes. Housing Crash? No.

Last week, it was announced that the U.S. Economy is officially in a recession. This did not really come as a shock to anyone. The pandemic shut down the country this last spring caused a significant decline in economic activity; a recession is defined as such.

The media around this announcement can’t help but have consumers recall the devastating impact the Great Recession of 2008 had on the housing market not all that long ago. 

However, chief economists and experts wish to remind that the real estate market is in a totally different position than it was just over a decade ago. They are claiming that unlike the housing crash that led the recession in 2008-2009, today’s market is poised to bring the nation out of the recession occurring now.

Four major differences in today’s real estate market are:

  • Families have large sums of equity in their homes.
  • There is a shortage of homes on the market, not an overabundance.
  • Irresponsible lending no longer exists.
  • Home price appreciation is not out of control.

It’s important to understand that this recession does not equal a housing crash. In fact, in the last 3 of 4 recession periods prior to 2008, home values actually increased; in the other home prices depreciated by only 1.9%.

Even though we are now officially in a recession, this current housing market is absolutely in a stronger position to weather the storm than it has been in the past.

Posted in Market Updates
June 12, 2020

In the Community – Ongoing and coming up

Summer is arriving and while the world gradually resumes outdoor activities and group events, here are a few things to look forward to and enjoy in our own backyard.

Torrance Rose Float Flower Power - ongoing

Since 1914, there have been 65 City of Torrance floats in the Tournament of Roses Parade. This year, due to the virus crisis, funds are low to support their January 2021 appearance. Our community can help by purchasing the finest, best-quality (well-priced, with 100% replacement guarantee) bulbs and plants from this fundraising site.  

Also, see the Rose Float site's Events Calendar, for fundraising restaurant events in the South Bay, now gradually resuming and being scheduled.

Zoomtopia-Magical Creatures  Friday, June 26

Designed for children ages 8-12, this art exploration presented via Zoom by the El Segundo Museum of Art invites students to innovate magical creatures and sanctuaries for them, by improvising with materials found at home. Space is limited; find more information and reserve here.

Lunafest@home  Saturday, June 27

This annual traveling film festival comes to your home this year to celebrate, showcase, and champion women in film. Manhattan Beach Soroptomists participate to raise funds for local educational projects. Tickets are $20 for a 24-hour pass to enjoy films on Vimeo.

Redondo Beach Pier Music Series   Thursdays&Saturdays, starting Saturday July 16

Enjoy spectacular sunsets and evening breezes with live music that includes Rockabilly, Reggae, and a host of Tribute Nights. Schedule and details here.

Posted in South Bay Events