California housing market: Affordability rate decreasing

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High income earners may have no problem finding a home and settling comfortably in California. Middle- and low-income earners, meanwhile, may have to settle for less than what they want in a home to be able to afford it.

According to a report from HSH.com, a mortgage research firm, buyers need to have an annual take home salary of about $97,000 to reasonably afford a median-priced home in the Los Angeles and Orange counties. In the third quarter of 2014, a buyer would have been able to purchase a typical house at $10,000 less, indicating a rapid increase in home prices.

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Federal data show that higher home prices have driven hundreds of thousands of low- and middle-income workers to other states. California has been losing residents to other parts of the country since the 1990s and more than half of the most expensive real estate markets in the US are found in California.

This trend highlights a challenge to the economy: keeping workers of moderate means in some of the nation’s most expensive housing markets. For cities like Los Angeles, being able to attract the tech industry and its high income earners is well and good but its leaders also need to make sure that the city is supporting a housing and transportation infrastructure for middle- and low-income earners who contribute to the local economy.

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Jeff Yarbrough is a top-producing licensed realtor who has knowledge of all of Los Angeles’ most desirable neighborhoods.

REPOST: Why You Shouldn't Mix Real Estate with Relatives

Mixing family and any kind of business is never encouraged. The same can be said for getting family member as your real estate agent. This article from Life Hacker explains why.

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If you're shopping for a home or selling your current one, it can be helpful to have a family member or friend of the family that's a real estate agent. However, if they don't specialize in your community or know your market, think twice about straining your relationship by asking them to work with you.

Over at US News Money, they offer up a few reasons why you may want to avoid asking relatives—or even just friends of friends—to be your agent, especially if you're selling. For one, they may not know the neighborhood, and beyond that, you don't want to endanger your relationship with them with something that's often stressful for everyone involved. Imagine how well that would go over at the dinner table for the holidays:

Unless your relative is a crackerjack full-time agent who specializes in your neighborhood, he or she is unlikely to do as good of a job as another agent. That can breed resentment, as well as derail your transaction.

... Finding a neighborhood expert is especially important in areas where moving a block can raise or lower the value of a home by $100,000. An agent who specializes in a neighborhood may also be in touch with buyers who are looking for a home just like yours or sellers who haven’t put their home on the market yet.

The guide also suggests keeping your distance from part time agents, as they may be slower to react to news about your home, or sales and listings in the area if you're on the hunt in a competitive market. That one might be a bit tougher though, many real estate agents also work other jobs, so take that one with a grain of salt. Either way, you can check out all of the tips at the link below.

Choosing the right neighborhood: A guide for first-time home buyers

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A house may have everything one needs, but is it located in the right neighborhood?

While an apartment in a chic, busy neighborhood might be perfect for a millennial with no dependents, a family with small children has different needs that have to be addressed.

Before starting a home search, home buyers should make a list of what they're looking for in a neighborhood. The following are some factors to consider:

Access and transportation

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Suburban communities are usually designed around a town center, where residents can shop, dine, and socialize, and its residents typically drive to work. Neighborhoods located near or in cities typically benefit from numerous public transit options.

The presence and proximity of grocery stores, banks, parks, and other amenities, and the cost of transportation to access them should be considered when choosing the right neighborhood.

Safety

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No one wants to live in an unsafe neighborhood. Home buyers should research online to determine a community's violent and property crime rates and compare the numbers with those of other communities. The local police department will also be able to provide valuable information on the safety of the area.

Education

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A home buyer who has children or is planning to have children should consider homes near good schools. If a home is on the bus route, that translates to more convenience for both parents and children.

Proximity to top-ranked schools is important, whether or not the home buyer has or is planning to have children. A study has shown that people are willing to pay more for homes located near good schools, so buyers who are planning to sell their homes in the future would do well to invest in a home in this type of neighborhood.

Once home buyers have made a list of what they want in a neighborhood, they should consult with their realtor or real estate agent to help them find a home in a community where they can confidently put down roots.

Follow this Jeff Yarbrough Twitter account for discussions on home buying.

Two walkable L.A. neighborhoods for millenial home buyers

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The surveys revealed that millennials want to live in walkable neighborhoods.

Millennials, also called Generation Y, are a group of young adults born from 1980 to 2000. The generation's personality is defined as culturally-diverse, upbeat, confident, liberal, and open to changes.

A survey by the Rockefeller Foundation found that 66 percent of millennials said that access to efficient transportation services is one of the top criteria they would consider when deciding where to live, while 54 percent of respondents would consider moving to another city if it had better transportation options. Another survey, conducted by the American Planning Association, found that baby boomers and millennials want many of the same things, one of them being walkable communities.

Walkscore, a website dedicated to promoting walkable neighborhoods, has compiled a list of Los Angeles neighborhoods with high walkability and easy access to public transportation. The following are two neighborhoods from the list that could pique the interest of millennial home buyers (and renters.)

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With a walk score of 93 (walker's paradise, according to Walkscore,) and a transit score of 99 (world-class public transportation,) Downtown L.A. tops the list of walkable communities in Los Angeles. The area has more than 800 dining establishments, 47 buses, two subways, and two light rail lines. Downtown L.A. is safer than other neighborhoods as well, with a lower personal property crime rate per person than the city average. This might be due to the presence of members of the Purple Patrol, a troop composed of "district safety" officers and maintenance staff who ensure that the area remains clean and safe for residents and tourists alike.

Chinatown is the second most walkable neighborhood in Los Angeles, with a walk score of 91 and a transit score of 91. Residents do not need a car to do errands, and the area has more than 130 restaurants, coffee shops, and bars. The area also has grocery stores, dry-cleaners, art galleries, schools, and a hospital. The personal crime rate is slightly higher than the national average.

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Los Angeles is known for being car-friendly, but that may soon change as more and more neighborhoods are promoting walkability over drivability and more millennials are making their needs known to the real estate world.

Jeff Yarbrough is a real estate professional and philanthropist from West Hollywood. Subscribe to this blog for more articles on California real estate market.

Los Angeles and its skyrocketing property prices

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According to the latest report, the real estate markets of Los Angeles and Orange County have grown to such a degree that property prices have skyrocketed, making the areas the least affordable in the United States. These conclusions were taken from figures by Zillow, an online real estate database. Based on the trend, investors can expect home prices to increase by 5.7 percent in 2015.

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Based on Zillow’s data, Los Angeles homeowners spend around 47.9 percent of their income just to pay for a median-priced rental apartment, and 42.6 percent to afford a median-priced house. While Los Angeles tied with San Francisco last year in terms of general house market prices, the rate of expansion for the California county has been faster than other cities and states. Prices have grown so much that people from middle-class households are feeling the pinch.

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Perhaps the effect can be attributed to the income-price ratio. After all, housing prices in the county are not as high compared to other cities such as New York, Boston, or Washington. However, people who live in these areas generally earn more than the average Californian. Zillow computed that the average household income for families in San Francisco in the second quarter was $76,239, while families in the LA-O.C. area survived on a mere $59,424. Despite the almost $20,000 income difference, families in Los Angeles are paying the same rates as those renting in these three cities.


Still, the rapid growth is seen to be beneficial for the community as it will spur local job growth. Real estate investors and analysts agree that more time is needed to fully access the effects of this sudden expansion.


Jeff Yarbroughhas helped hundreds of clients in Los Angeles find a home within their budget. Learn more about his real estate experience and expertise here.

Getting real estate property sold for the best price

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When the values of homes in the US rebounded over the last few years, many homeowners found themselves in a good position to sell their homes for profit. It’s a good idea, after all, especially for those who have been meaning to move to a different location or to a bigger home.

Still, no matter the situation of the housing market, selling any residential property remains difficult. Sellers have to compete, while there are times the market favors the buyers. Here, then, are a few tips on selling a house for the best price.

First, it is important to study the market. Using real estate sites, home sellers can research on the buying prices of properties similar to their homes. They can also check how long the properties have been on the market before they got sold and if these properties sold for more or less than their initial asking price. Knowing these beforehand will allow the seller to put the property up for sale at a price that is close to what buyers are amenable to.

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Second, the aid of a local realtor is recommended. Local agents know more about the neighborhood and the situation of the local market, so they can offer better advice on what the seller can do with the property. They might also be privy to some transactions that are not yet available to the public, which can be a vital factor to determining the price of the home for sale.

Third, setting a deadline determines the price. This can create competing bids among buyers and allow the seller to get an offer that is close to their ideal price to sell.

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For more articles about the housing markets, visit this Jeff Yarbrough Facebook page.

A brief overview of the home-buying process in Los Angeles

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The sunny weather, palm trees, and diverse neighborhoods make living in Los Angeles a dream come true for many. Buying a home in LA might seem difficult, especially in today's competitive housing market, but all home buyers need are the right information and professional advice to find and buy their dream LA home. The following are some steps to get them started:  

Pre-qualifying

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Many people think that they don't have to pre-qualify for a house until after they've found a property they want to buy, but many realtors advise talking to a lender at the beginning of the home-buying process. It's best to know one's buying ability early on to avoid wasting time looking at properties that are out of one's price range. Additionally, a buyer cannot make an offer on a property without a pre-approval letter from a lender.  

Hiring a real estate agent or a realtor

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Real estate agents and realtors have access to the Multiple Listing Service (MLS) database, which has up-to-date information on active property listings. In addition, they will also guide prospective home buyers on defining their criteria and educating them on the home buying process step-by-step.  

Determining needs and wants

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At this point, home buyers should have a discussion with their realtor or real estate agent and make a list of their wants or needs in a home. Some relevant points to discuss are location, proximity to schools and the workplace, type of property, and home features. They should determine which are necessities and which ones can be done without.  

Negotiating and making an offer

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Home buyers can pay the list price, or they can try negotiating. Negotiations might take a long time, especially if the seller finds the buyer's offer unreasonable and provides a counter-offer. If both parties come to an agreement and the seller accepts the offer, the escrow phase will begin.

The escrow process is a complicated phase in the home buying process, as it involves making a deposit, doing a home inspection, and appraising the property. If they have not done so yet, home buyers might want to seek the services of a real estate agent or realtor for assistance in the escrow process until the completion of the sale.  

For more real estate tips, follow this Jeff Yarbrough Twitter.