Rodeo Realty

L.A. County’s unemployment rate in February fell to 8.7% (from 8.9% in January) with employers adding 27,700 jobs to their payrolls (they lost 63,000 jobs in January). A year ago the rate was 10.2%. The statewide unemployment rate in February was 8%. Los Angeles and Long Beach both had 9.8% unemployment. Over the past 12 months, employers in L.A. County have added 86,000 jobs to their payrolls, for a growth rate of 2.1%.

It was a mostly down week in the markets. Friday saw a boost from the news that consumer spending rose in February at the fastest rate in several months, up 0.3% last month on a seasonally adjusted basis. Americans spent more money on health care and utilities but purchases of durable goods fell for the third month in a row. Also personal income rose 0.3% in March and the U.S. savings rate hit a four-month high of 4.3% from 4.2% in January. Inflation-adjusted disposable income was up 0.3%, the biggest advance in five months. The Dow rose this week to 16,323.06 up 0.13% from last week’s close of 16,302.70. The Nasdaq however dropped to 4,155.76 down -2.83% from last week’s close of 4,276.79 led by a plunge in biotech stocks. This was the worst week for the Nasdaq since October 2012. The S&P 500 also fell, ending the week at 1,857.62, down -0.47% from last week’s 1,866.40 close.

The ongoing effect of the Fed’s remarks last week continued to be felt on interest rates. The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate rose  to 4.40%, the rate was 4.32% last week. The 15-year-fixed rose to 3.42% from last week’s 3.32%.  A year ago the 30-year fixed was at 3.57% and the 15-year was at 2.76%.

The 10 year treasury bond yield ended the week at 2.73%. It was 2.75% last Friday.

The Commerce Department reported that sales of new U.S. single-family homes fell -3.3% in February to a seasonally adjusted annual rate of 440,000 units which is the lowest level seen since last September. The rate was down -1.1% compared to February 2013. Sales fell -15.9% in the West. January’s sales were also revised downward to a 445,000-unit pace from a 468,000-unit pace. Some of the slowdown continues to be blamed on unusually cold weather but economists are predicting a rush on homes as household formation begins to accelerate again with the improving economy.  Inventory is at a 5.2 month supply, the highest level since December 2010. The median price of a new home was down -1.2% from February 2013.

Consumer confidence rose to its highest level in more than six years. The Conference Board indexrose to 82.3 in March compared to 78.3 the previous month. Consumers expect the economy to continue to strengthen and are showing optimism that both business conditions and the labor market will improve over the next six months.

The composite 20-city S&P/Case-Shiller home price index  was up 13.2% in January from a year earlier with all 20 cities showing year-over-year gains.  Prices in the 20-city index were 0.1% lower than the prior month, but that is mostly due to the cold winter throughout much of the country,  adjusted for seasonal variations, prices were 0.8% higher month-over-month.  For the Los Angeles metro area, prices were up 18.5% year over year and down -0.3% month over month (but up 0.4% once seasonally adjusted).

The National Association of Realtors^® reported that its seasonally adjusted pending home sales index was down -0.8% to 93.9., it was down -10.5% from February 2013. A combination of cold weather, higher mortgage rates, and limited inventory have cramped the market but most economists are expecting a spring rebound.

The California Association of  Realtors^®  however saw that pending sales were up in February, jumping 14.2% from January but down -12% from last February. The index rose from 84.8 in January to 96.8 in February and was 110.1 in February 2013. Distressed sales continue to be a smaller part of the market. Equity sales were up statewide, increasing to 85% from January’s 84.4%. In Los Angeles, single-family distressed sales were 14% of the market compared to 16% in January and 32% one year ago.

Next week will be a big week for economic news. Perhaps the most telling report that could impact interest rates is the jobs report which will come out at the end of next week. Expect rates to rise on a good report, 180,000 new jobs or more. Expect rates to remain stable at 160,000 or so, and if the report comes in much lower rates could drop! Good news for the economy is bad news for interest rates ( they rise), and bad economic news is good news for rates ( they fall).

Locally we are seeing a spring surge in prices. we are not seeing as many new listings as we would usually see in March, but I would expect many more in the next few months!

Recently noted architectural lecturer Eleanor Schrader Schapa met with Rodeo Realty agents for an inspiring morning full of architectural history and information. While naysayers in other areas may say that Los Angeles lacks culture, the opposite is true especially when it comes to great architecture. The architecture of Los Angeles reflect the city’s role as home to many different cultures. There are two main periods that influence much of architectural style in the area. The first is of course the mission period. Missions were established in Southern California partly to keep others, including Russian fur traders, from making a land grab. The oldest standing house in Los Angeles is the Avila Adobe, built in 1818 and now open as a museum. The classic adobe walls are several feet thick. In 1850 Phineas Banning established the Port of Los Angeles. Like many new arrivals he brought the styles from the East Coast with him. His home, in Wilmington, California, is also now a museum and reflects the Greek Revival style that was popular at the time.

Los Angeles has attracted many different styles of buildings. Although there are some excellent examples of Victorian and Italianate architecture throughout the city, the style doesn’t quite reflect how people in this area prefer to live, in larger open rooms with plenty of light and space. The restrictive nature of Victorian homes and the ornate syle of Beaux Arts led to the response that was the arts and Crafts movement. Arts and Crafts was a return to simplicity, to styles that were considered to be more organic and of the earth. Famed furniture maker Gustave Stickley espoused this view in his magazine, The Craftsman. Sears took the idea of Stickley’s floor plans and designs and sold a variety of kits that contained everything necessary to build the home of your dreams.

The Art Deco period was also a time of the flowering of Los Angeles as the movie industry moved from New Jersey to Los Angeles. This time period saw a variety of styles, in particular the Spanish Revival with red tile roofs and thick adobe walls. Schapa pointed out two very interesting features about these homes. The first is that those red tiles that are often on the roofs of these homes actually get their curved shapes from clay being shaped over the workers’ thighs. The second is that the particularly pointed yet wide arch seen in many of these homes including the Adamson House, is actually not a Gothic arch but is instead a donkey arch, named for a type of arch popular in Mexican architecture that gets its name from the room needed to pass a rider and donkey laden with packages through it.

Although we have a variety of styles here, from the cutesy charms of  English Tudor, French Normandy and Storybook homes to the sleek lines of Streamline Moderne and International style, Southern California is probably most famous for its mid-century moderns. The Case Study homes including the Eames house and the Schulman-photographed Stahl house represented the start of something amazing, a new view of home architecture for the post-war era.  These angular beauties, with their minimalist lines and ample use of glass usher in the era of the Los Angeles lifestyle. Schapa touched upon the popularity of the ranch home as seen at the time both on television and in the pages of Sunset magazine. It was the age of the martini, the wide-bodied American car, the swimming pool, and the nuclear family.

Los Angeles uniquely seems to embrace all styles. As with food, culture, art, and more, we seem to have room enough for all of it. It’s a major part of what makes this such a fascinating place to live and work. Schapa’s lecture reminded all agents not just of the beauty of the homes they see every day but of the rich legacy they represent.

 

 

For the first time in nearly six years the Los Angeles County jobless rate is below 9%.The county unemployment rate for January was 8.9% the lowest level since November 2008 and a dip below December’s rate of 9.2%.  The state Employment Development Department also reported that the county lost nearly 63,000 jobs between December and January mostly due to post-holiday layoffs in retail. An annual revision resulted in 200,000 more jobs showing up on employer payrolls in the county than previously estimated. In the past 12 months, the county added 91,000 jobs a growth rate of 2.3% with the biggest gains coming in professional and business services, which were up 27,000 jobs, and health care/social assistance, which were up 19,000 jobs. The statewide unemployment rate for January was 8.1% still above the national rate for January of 6.6%. On a national level this week, the number of Americans filing new claims for unemployment benefits unexpectedly fell hitting the lowest level since November.

Stock markets were lower this week as concerns over  a slowdown in China and the tensions between Ukraine and Russia dominate the news. Russia continues to advance into the Crimea and has been threatening to enter other parts of Ukraine despite demands from the West to pull back. The Crimean Peninsula is holding a referendum this weekend on whether or not it should secede from Ukraine and join Russia. Also this week it was reported that U.S. wholesale prices fell for the first time in three months. Consumer sentiment as measured by the University of Michigan and Thomson Reuters  index dropped to 79.9 this month down from a February final level of 81.6. Rising gas prices and larger geopolitical worries are believed to have played a major role. The Dow fell this week to 16,065.67 down -2.52% from last week’s close of 16,452.72. The Nasdaq  was also down this week closing at 4,245.40  down-2.09% from last week’s close of 4,336.22. The S&P 500 ended the week at 1,841.13, down -1.96% from last week’s 1,878.04 close. Markets in Europe and Asia showed much larger drops, average drops were about 5% for the week.

The 10 year treasury note yield rate fell to 2.65% after closing at 2.80% last week. Most of this drop in yield took effect on Thursday and Friday. This has caused mortgage loan interest rates to drop in the last couple of days!

The Freddie Mac Weekly Primary Mortgage Market Survey showed that the 30-year-fixed rate was back up to 4.37%, the rate it was two weeks ago. The rate was 4.28% last week. The 15-year-fixed rose to 3.38% from last week’s 3.32%.   A year ago the 30-year fixed was at 3.63% and the 15-year was at 2.79%. Once again the survey is done in the beginning of the week. Rates are actually lower. We are seeing loans $417,000 and under at the 4,25% level for 30 year terms, and 3.375% for 15 year loans. Jumbo 30 year are closer to 4.5% and 15 year loans are about 3.625%.

The February numbers from DataQuick show that sales for the six-county Southland area dropped to the lowest level for a February in six years however prices continue to rise in many mid-level and high-end areas. A total of 14,027 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, down -3.1% from 14,471 in January, and down -12%  from 15,945 sales in February 2013. Since 1988, when DataQuick’s statistics begin, February sales have ranged from a low of 10,777 in 2008 to a high of 26,587 in 2004.Last month’s Southland sales were -20.1% below the average number of sales – 17,560 – for February since 1988. The median price paid for all new and resale houses and condos sold in the six-county region last month was $383,000, up 0.8%  from $380,000 in January and up 19.7% from $320,000 in February 2013. The median sale price has risen on a year-over-year basis for 23 consecutive months. In Los Angeles County alone, the sales volume of 4,595 was down -16.2% from last February’s 5,481. The median price rose 21.7% year over year up to $426,000 from $350,000.

DataQuick also reported that the number of homes sold in the mid and upper ranges continue to rise. The number of homes that sold from $300,000 through $799,999 rose 2.1%  year-over-year, the  number that sold for $500,000 or more increased 12.2%    from one year earlier, while $800,000-plus sales rose 4.9%.In February, 32.6%  of all Southland home sales were for $500,000 or more, up from a revised 32.2 % the month before and up from 24.4 % a year earlier. Foreclosure resales continue to be smaller part of the market, 6.8% of the Southland resale market in February compared with 16.2% a year ago. We continue to see an above-average amount of cash buyers, cash buyers were 30.9% of home sales in February which was down from a record 36.9% last year but still far above the monthly average of 16.4% of all sales.

What we need is more inventory. It seems like there is two types of inventory: drastically overpriced homes that are sitting and well priced homes that are selling quickly with multiple offers! Unfortunately, the number of drastically overpriced homes that have no chance of selling are making the inventory numbers appear to be higher than it is,  but we, on the ground, know that the real inventory of properly priced homes are at very low levels. It’s odd. We have seen a good number of new listings in some areas and very few in others. There is no consistency yet. I would expect new listings to pick up drastically as we head into spring! With more inventory we will see more sales. It is low inventory that is causing lower sales numbers, and driving prices up!

Have a nice weekend!