5526 Calhoun Ave - Sherman Oaks

5526 CALHOUN AVE

Listed at $1,799,000 with 3 beds, 3 full baths, 1 half bath, and approximately 2,300 sq. ft.

Mid-century architectural gem in Chandler Estates in Sherman Oaks. Originally built in 1947, redesigned by architect Leonardo Chalupawicz in 1997.

I love everything about this property. Beautiful entrance to the property that features tons of light, exposed structural I-beam, glass block walls, pitched ceiling, pool, and a guest house.

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Listed by Olga Crawford with Sotheby's International Realty

LADBS pre-approved adu plans

If you’re thinking about building an ADU. It would be worth it to check out the pre-approved standard ADU plans on LADBS. Check them out here. Below are a few options I saw on the website.

Corelogic confirming what buyer's are experiencing in Los Angeles

U.S. Case-Shiller Index Reverts the Slowdown in July to the Fastest Rate Since 2018

Prices in the lower and medium tier markets rising faster then the highest tier. Los Angeles leads the 20 city index with the largest price appreciations in July. The silver lining here is that owner’s that are experiencing financial hardship or job insecurity from he pandemic with most likely have positive equity in the event that they have to sell after the moratorium on mortgage payments.

Corelogic Home Price Index updated for June 2020

Corelogic published an update to their Home Price Index (HPI) for June 2020. The highlights are:

• National home prices increased 4.9% year over year in June.

• Home prices are forecast to decrease by 1.0% from June 2020 to June 2021.

• Home Price decreases will hit nearly two thirds of all U.S. states.

Because of the economic downturn that started in March, the HPI is predicting a 1% drop in June 2021. People on Twitter and real estate agents in Los Angeles aren’t seeing this decline as a possibility because there is incredible demand now. Home prices in 2020 are currently following the 2001 recession.

What happened in the past?

In March 2001 - Nov 2001, interest rates for the 30 year fixed fell 7% from 7.03% - 6.56%. From Feb 2020 - Aug 2020 rates have already fallen 13% from 3.45% - 2.99%. The FED reduced interest rates 11 times in 2001 and reduced taxes with the EGTRRA: The Economic Growth and Tax Relief Reconciliation Act of 2001. [Reference The Federal Funds Rate History]

The federal funds rate currently is .25%, effectively zero. Federal funds rates have hit .25% in the past in December 2008, Between 2008 and 2015, the Fed kept the rate at zero. The recession ended in June 2009.

Where do we go from here?

We don’t have any room left on interest rates. I don’t know what that means for the future. I think we are currently in a volatile phase where we could get inflation or deflation over the next 10 years.

30-year mortgages hit their lowest rate ever

The Wall Street Journal recently reported that on July 16, 2020 30 year fixed mortgages hit their lowest level ever in at 2.98%, with 15 year fixed mortgages at 2.48%. It seems that every few months we hit a new low.

The low supply of housing inventory paired with the lowest interest rates ever has caused pricing in Los Angeles to stabilize from March and in some situations go up. Currently, buyer’s want to buy motivated by low rates. Seller’s who are interested in selling should take advantage of market enthusiasm.

Looking at real estate over the longer term. One of the effects of interest rates lowering over time is that mortgage payments are relatively cheap on a national level. When you compare the appreciation in real estate values against the mortgage payments, the monthly payment hasn’t grown nearly as much. This is because of interest rates falling over the last 30 years. From A Wealth of Common Sense, Mortgage rates are insanely low, “The growth in the median sales price since 1990 is close to 190% while the monthly payment is up just shy of 40%.”

Table from Wealth of Common Sense

With the federal government stimulus, forbearance on mortgages, and the moratorium on evictions. There is a lot of uncertainty lingering over the economy and housing. With that being said, housing is currently on of the brightest segment of the economy. In a post by National Association of Realtors, “Yun (NAR Chief Economist Lawrence Yun) expects that the positive GDP growth of 4% in 2021 will boost both existing and new home sales, which he forecasts to grow by 7% and 16%, respectively. Mortgage rates are anticipated to stay at near 3% over the next 18 months. Home prices will likely appreciate 4% in 2020, before moderating to 3% in 2021 as more new supply reaches the market, according to Yun.”

Articles referenced or reacted to:

An indicator that presaged the housing crisis is flashing red again
U.S. Banks Signal No V Recovery With Provisions Near Record
Mortgage Rates Are Insanely Low
U.S. Case-Shiller Index Continued to Climb in May, Albeit at Slower Pace
Pending Home Sales Mount 16.6% Increase in June