Housing Affordability Market Update

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Improved economic conditions and more job availability throughout the state benefited the housing market and continued to push sales higher. Mortgage rates returning back to near record-low levels in the first half of the year, coupled with an anticipated rise in the fed funds rate later this year, may also have prompted prospective buyers to feel a sense of urgency to enter the market.

The statewide sales in July exceeded 400,000 for the fourth consecutive month, and July 2015 was the month with the highest sales level since Oct 2012. The strong momentum in the first half of 2015 elevated sales in the first seven months to 407,060 (seasonally adjusted and annualized), an increase of 7.1 percent when compared to the same period of last year.

After reaching the peak in nearly eight years, the statewide median price in July dipped slightly to $488,260 from the previous month, but remained close to the recent high reached in June. The median price continued to improve at a moderate rate from the previous year, with a year-over-year gain of 5.4 percent in July 2015. While the median price continued to improve from the previous year, the rate of increase has been decelerating steadily in the last twelve months.

The combination of modest price appreciations and low interest rates kept housing affordability from declining further this year in most areas, despite higher prices. In fact, the statewide Housing Affordability Index (HAI) actually rose in the first quarter of this year to 34 percent before dropping

back to 30 percent in the second quarter. With interest rates expected to rise in the second half of 2015, housing affordability will become a bigger challenge for many potential home buyers, particularly for those who reside in high-cost areas such as the Bay Area.

The California housing market should continue its momentum and have a solid performance throughout the rest of the year. Sales, however, could cool off slightly in the fall as mortgage rates gradually rise. With the economy growing faster and the labor market improving next year, more households will be formed as consumer confidence continues to rise. As a result, sales activity is expected to inch up in 2016.

Inadequate supply in high-end areas such as the Bay Area is exerting upward pressure on prices, but home sales in those regions are simultaneously being constraint. The constraint in home sales in the Bay Area could eventually lead to a decline in the share of high-end homes sales to overall home sales, which could also lead to a further slow-down in the appreciation in the statewide median price. As such, the statewide median price is expected to increase only modestly this year and in 2016.

Sold, Pasadena Home

We are pleased to announce the successful sale of the beautiful Pasadena home. Here's the story about the sale in the sellers' own words:

My siblings and I were very happy with the expertise, consistent personal attention, and negotiation process of my agent, Loretta with Esquire Real Estate, in the sale of our deceased parents' home in Pasadena. Loretta, with the support of Bryan her attorney–broker with Esquire Real Estate, kept us focused on the most important aspects of the sale considering the complexity of our parents' trust.  Bryan made suggestions regarding the trust paperwork and interfaced with the title company, other broker, and escrow.  Bryan's legal expertise helped us with the trust decisions that had to be made in a way that helped satisfy all parties.  Loretta’s consistent communication and coordination with the buyers and agent within the selling process was truly superb, considering we had very particular and fearful buyers.   Loretta’s negotiations also obtained a selling price among the highest of that neighborhood.  Loretta was deeply entrenched with the numerous city-planning department requirements and their evaluation and demands of the building code and restrictions.  She was able to obtain a very favorable result with the city, spending incredible amounts of time with the individual departments.  We are truly grateful for her expertise, professionalism, negotiation skills, and the ultimate results we received.  My siblings and I are so happy that we chose Esquire Real Estate to represent us in our successful sale and closing.

Here are more comments from our past sales.

Esquire Real Estate presents a real estate sales model that is flexible to the needs of our clients. If you are looking to buy or sell real estate contact us or call directly (949) 421-7097.

Selling real estate in a living trust

With the increasing popularity of living trusts holding real property in Southern California, Esquire Real Estate has seen an uptick in clients utilizing the attorney-broker services of Esquire Real Estate to sell property inherited through a living trust.  A living trust (also known as an inter vivos trust) is a trust created during the lifetime of the grantor or trustor with specified beneficiaries that receive the trust property upon the death of the trustor, or as otherwise specified in the trust agreement.  Living trusts are helpful for avoiding the time and expense of probate and simplifying the process for the heirs following the death of the trustor.

In the context of a home or other property, generally, following the death of the trustor (usually the original owner of the real property), the trust document names a successor trustee or co-trustee to manage and administer the estate and sell the property in accordance with the trust agreement.  The successor trustee has several duties and responsibilities in the timely sale of the trust real property, the most common of which are summarized below:

Trust Listing Agreement:

When the property is ready to be placed on the market, the successor trustee, acting as the seller in the capacity of trustee of the trust, will execute a trust listing agreement with a real estate broker for the sale of the property. 

Reduced Disclosures:

The seller/successor trustee of a living trust is exempt from many of the common disclosure requirements and in particular, the Transfer Disclosure Statement, Natural Hazard Disclosure Statement, statement of compliance regarding operable smoke detectors, and provision of the earthquake safety guide.  However, the seller/successor trustee of a living trust is not exempt from disclosure of material facts, natural hazard zones, lead-based paint, water heater compliance, and carbon monoxide detector installation in the home, Megan’s Law Database Disclosure, and tax withholding.

Affidavit of Death of Trustee and Appointment of Successor Trustee:

Before the close of escrow, the successor trustee will be required to complete, execute, and have notarized an Affidavit of Death of Trustee and Appointment of Successor Trustee.  The Affidavit states that the original trustor died on a specific date and that the trust agreement named the successor trustee as successor trustee.  A certified copy of the original trustor’s Certificate of Death must be attached to the Affidavit.

These are only a few of the legal requirements and features of selling California real property through a living trust after the death of the original trustor.  If you have any questions regarding living trusts or the sale of your real property through an attorney-broker, please contact Esquire Real Estate.

In Escrow, Pasadena

Esquire Real Estate is pleased to announce that we have entered escrow on this lovely Pasadena home. If you have any further questions about this or another property, please contact us and we can assist you. Here is a link to the original blog.

Sold, University Heights Home

We are pleased to announce the successful sale of the beautiful University Heights home in San Diego. Get the story on the sale from the sellers' own words:

"Esquire Real Estate was extremely beneficial in assisting us in selling a family home in San Diego. Bryan kept us focused on the sale of the home with the complexity of having 11 beneficiaries in a trust.  He interfaced with the trust attorney to complete paperwork and made suggestions to us for communicating with the beneficiaries that had questions on the selling process.  There were trust decisions that had to be made, and Bryan’s legal expertise helped keep us on track. Lacey coordinated the photo tour of the house, presenting the property to its best advantage, and we received multiple offers within 24 hours.  Bryan negotiated with the buyer to obtain a selling price over the asking price and helped maintain the buyer’s enthusiasm for buying a Craftsman-style home.  We are glad that we chose Esquire Real Estate to represent us in our sale."

Here are more comments from our past sales.

Esquire Real Estate presents a real estate sales model that is flexible to the needs of our clients. If you are looking to buy or sell real estate contact us or call directly (949) 421-7097.