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LA Digs - Northeast LA Real Estate Blog

Welcome to LA Digs, the real estate and Northeast Los Angeles community blog written by Realtors Tracy King and Keely Myres.

Here, we share tips, market updates, and local news bits to keep you informed on what's happening in Northeast Los Angeles and the surrounding neighborhoods. Read on to learn about the latest in your neighborhood!

Real Estate Now Considered an "Essential" Business

Things are changing every day in these wild times we live in!

Per the California Associaton of Realtors - "On March 28, the U.S. Department of Homeland Security Cybersecurity and Infrastructure Security Agency (CISA) updated its list of essential services during the coronavirus (COVID-19) crisis and expressly included residential real estate. Since Governor Newsom’s March 4, 2020 order incorporates this list, the order now includes residential and commercial real estate, including settlement services, as essential services in California. However, if a city or county has an order with a more restrictive standard regarding what qualifies as an essential service, or more restrictions on activities, those guidelines will still govern the activities of a licensee.

Notwithstanding this new development, all real estate licensees must take into account the health and safety of their clients and fellow licensees, and follow the existing protocols for protecting against the spread of COVID-19. If such heath safeguards and protocols are not followed, the rule for the state could easily change to stop or restrict all real estate activity. To that end, in conformity with current health guidelines, real estate licensees should follow all CDC and local health mandates. 


1. No open houses should be held.


2. Showings should be done virtually, if at all possible."

Our local Realtors board has released this information as a result:

"Despite the updated announcement—it is advisory in nature. Any city or county guidelines which describe what qualifies as an essential service, or ones that place more restrictions on activities, will govern the activities of a licensee.  

At the time of this communication, Pasadena and Los Angeles County, have yet to update their orders, and remain under the more restrictive standard. Real estate professionals are still not classified as essential services. 

The Stay-at-Home order for Los Angeles County and Pasadena remains in place. Activities such as in-person showings should continue to be held virtually if possible and open houses are not permitted at this time."


We are still navigating through this situation, and the health and safety of our families, our clients, and our communities is our main priority. 

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Real Estate Must Be Virtual, For Now

Chaos! Every day brings a new interpretation of the current edicts given by all the heads of state—the president, the governor, the mayor, CAR (which is the California Association of Realtors), the police, I’m sure there’s more. As of Thursday, March 26, 2020, basically, we are supposed to stay home except to procure food, health care, to walk, or perform an essential job. Therefore, we Realtors are in a curious Catch-22 situation: we can’t meet buyers or sellers at a property, we can’t order inspections because inspectors aren’t considered essential (but sellers can hire them to find out if they need repairs if they want or need to do),  buyers can get loans and appraisers can do desktop appraisals, escrow companies can work, counties can record sales, movers are considered essential, but if sellers sell and they need to buy another home can they? If you see some inconsistencies in all that, you are correct! 

While the initial Stay at Home Order seemed a little more vague with regards to real estate and whether or not it is an essential job, the California Association of Realtors has clarified with the following: 

"On March 19, Governor Newsom and the State Public Health Officer issued Executive Order N-33-20 requiring all Californians to stay home except as needed to maintain continuity of operations in 16 infrastructure sectors. This supersedes all existing local city and county orders that are less restrictive. The real estate industry is not exempt from this prohibition except as needed to maintain “continuity of operation … of … construction, including housing construction.” Therefore, REALTORS® should conduct as much of their business as possible using virtual means. REALTORS® should cease doing all in-person marketing or sales activities, including showings, listing appointments, open houses and property inspections. Clients and other consumers are also subject to these orders and should not be visiting properties or conducting other business in person."

Fear! I just read that the US now has 80,000 cases of COVID-19, the most of any country in the world. How would you feel if something you did caused someone to contract COVID-19?  How would you feel if they died from it?  This is serious folks. We don’t want to do anything to make this pandemic get any worse, to kill more people, to extend this one day longer.  We have to consider this more seriously than many of us have been. 

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Coronavirus and Local Real Estate

So as of today, March 12, 2020, Coronavirus cases are spreading - first there’s one case reported, then 2, then 100, then a thousand. Universities and other schools aren't having live classes. Germy kids get to stay home and only infect family members and caregivers. The NBA has suspended the season. Wow! And mortgage interest rates are so volatile that lenders aren’t publishing them. In fact, some lenders aren’t taking any new or refinance business because they have more than they can handle. 

I called Natalie Salins at Movement Mortgage and she told me that she thinks with a lot of guessing that rates will settle down around where they were before all this—3.5 to 4%. Doug Smaldino at Hillhurst Mortgage thinks around 3.875%. They both are still doing business, so give them a call.  And those are the good rates for the best credit risks, all kinds of caveats noted.

It seems like every hour there's new cancellations because of the COVID-19 - all kinds of sports events, large gatherings of any kind, and, most shocking of all, Disneyland is closing Saturday through the end of March!  
 
Needless to say, this is affecting the economy. With Wall Street and stock prices crashing down, there is a look towards real estate as a much safer long-term investment. Several Realtors we know who had open houses last weekend said they were packed. Today on Realtors' open house caravan it was very busy, despite the rain and news.  We are ready for buyers with a few new listings coming on the market soon, so stay tuned. A little rain seems like no big deal in the face of everything else, right?
**Updated to add additional takes on Coronavirus' affect on real estate:
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Should You Buy a House in 2020?

Should you buy a house in 2020? Of course, this is a question that has a very complicated answer.
Two reasons that the answer is no: prices are high and inventory is low. Yes, interest rates are historically low which makes paying these historically high prices a little more bearable. Low inventory means a couple of things: it's hard to find the home of your dreams at the price you feel you can afford; it's extremely competitive in our market (we had 47 offers on one home in January, and we heard of another house nearby that had over 50 offers and is going $400,000 over the asking price!); also, it means the thought of buying your dream home (or any home) contingent on the sale of your current home is a losing proposition. Would you entertain a contingent sale on your own home? Probably not, because you want to minimize the things that can go wrong with the sale so you can move to the next step in your life without depending on variables you have little or no control over (like the price of the contingent home or the skill of the agent involved).

Despite those issues, I'm in the camp of yes, this is a good year to buy a home. I know what you're thinking - of course the Realtor thinks everyone should by a house right now! But the reason why? Because I don't think houses are going to get cheaper any time soon. The longer you wait, the higher they get. This has been true for 8-11 years, depending on how you look at it and where you live. And all along the way, people have been predicting a crash. Sooner or later, they'll be right, but I don't believe it's a good idea (or all that realistic, really) to plan your life on when that a crash will be. So you could be renting that apartment that's too small but fairly cheap for the next 5 or 10 years, and if your landlord is on top of it, you'll be paying more rent even if you're in a rent-controlled place. Last year the City of Los Angeles allowed a 4% rent increase, historically it's been at least 3%. That adds up over time.
What are the advantages of buying a home? A big one is that if you go with a fixed rate mortgage (and wow, rates continue to be really low), your payment won't go up, ever. And in California, your property tax won't go up much. Plus, when you get to age 55 or older, you can qualify for significant property tax savings, which I explained in last week's post about Proposition 60/90
But besides cost issues, there are the intangibles: you can fix up your home any way you like (within local laws); inside, you can generally decorate however you like - without a landlord dictating what you're allowed to do; and there is a feeling of being more connected to your community, more likely to get involved in some way with its governance, taking a more public role in institutions like schools, public works and buildings. There is a big feeling of permanence and substance that comes with owning property and investing in a neighborhood. Don't scoff, it's often what gives communities their character. 
I don't like the feeling of impermanence renting can come with (the landlord can tell you to leave even with rent-controlled units under certain circumstances). How about you?
If you're thinking that 2020 may be the year you buy a home or make a move, let's discuss the pros and cons! Every person's situation is varied and complex - we'd love to help you figure out the best option for you!
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It Pays to be an Older Homeowner

At last, a reason to be glad you’re older: California Proposition 60/90! If you or your spouse are 55+ and you’ve owned your home awhile, you might find this interesting.

Basically, you can take your property tax with you one time if you purchase a primary home that costs the same or less as your current home! This can be a huge savings, since in California, property tax is calculated on the original purchase price of your home. So, if you paid $325,000 for your home in 2000, sell it in 2019 for $1,250,000, then buy a replacement home within 2 years of its closing date for 1,250,000, you will pay about $5,333.00 per year instead of $15,625.50 per year!

You can do this anywhere in Los Angeles County (if that is where you owned your primary residence), and in a few other counties that change periodically, but currently they are Alameda, El Dorado, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, and Ventura. Be sure to check first before buying your replacement property in another county.

These laws were established in the 1980s, and I am often surprised how few people know about them. They were established to help seniors downsize, but there are no rules about house size, just price. These laws really help people of all ages, since it enables some seniors to move to a house with a more suitable floor plan when they otherwise wouldn’t, thus freeing up some houses better suited to families.

For more information, here is the Proposition 60/90 guide from the county assessor. Be sure to go to the County site, not companies that try to make you pay them to do the paperwork for you as it only consists of one page. You can get a copy of the one page form here, along with details and FAQs. Questions? Shoot me an email or text! You can reach me at This email address is being protected from spambots. You need JavaScript enabled to view it. or 626-827-9795. 

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