Yes Please, to a Park in South Park!

Motion for South Park parking Lot to Become Park

Located next to the AEG offices and across from the Elleven Lofts. Finally, a decent proposal from the city and one that if passes, will pave the way for more parks in DTLA.

https://www.spna-dtla.org/blog/motion-for-park-in-south-park-on-aegs-grand11th-lot

Buyer Now Paying Their Buyer's Agents, and Other New Rules

With the recent changes that took place on August 17, buyers are now having to jump through a few more hurdles to get that home. 

1. Buyers now need to sign an agreement with their agent to even view a property. Yes, this sounds clunky, but's it's just an agreement stating that you're being officially represented when you look at properties. This protects all parties.

2. Next, Buyers now are obligated to agree to paying their agents a commission for closing on a property--unless the agent doesn't want to be paid which will likely never happen. This is basically how it's done in NYC--it's like a finder's fee. This commission is of course negotiable.

3. Yes this sounds like a burden, but guess what, lots of little ways this can play out:

        - This obligation to pay commission to the Buyer's agent can be paid by the Seller.

        - When a Buyer submits an offer, they can ask the Seller to pay for this agent commission 

        - The Buyer just needs to write this into the offer.

        - Believe it or not, many Sellers are open to paying this obligation for the Buyer.

        - This commission, whether paid by Buyer or Seller, is negotiable.

        - If the Seller won't pay this, oftentimes, a lender can roll this into the loan amount.

Will LA Be Ready for 2028 Olympics?

Lots going on behind the scenes as the City of LA prepares for the Olympics a few years away. But will the city be ready?

That's the question on everyone's minds as renters consider buying, owners consider holding, and developers consider how to maximize profits by buying in the areas that will get the most "love" from the city.

A lot of the areas that the city will focus on where people will actually be visiting. Think of where landmarks are.

• South LA - lot of the stadiums and venues located here
• Beverly Hills, Hollwood - tourist landmarks, Hollywood sign, Walk of Fame, museums
• DTLA - where a massive amounts of newer hotels and public transit will be, along The Broad, Walt Disney Concert Hall, Grand Central Market, Arts District

One of the biggest city goals is to expand public transportation--otherwise we'll be in traffic and Uber/Lyft hell. LA was recently awarded $900M to Expand Public Transit which is step in the right direction:

https://www.nbclosangeles.com/news/local/los-angeles-secures-900-million-in-federal-funds-to-improve-public-transit-ahead-of-2028-olympics/3379834/?os=roku...&ref=app

The Mills Act Hack for High Interest Rates

There are basically only 2 things:

1. Get the Seller to pay for some of your loan points

2. Buy a Mills Act property

The first one is not as easy. A good lender will be able to do some juggling, switching, replacing and adding and subtracting to get you the best rate. But you have to assume the seller will pay for your points, give you closing credits, or some a shave in price to help offset your rate.

Or, you can simply buy a Mills Act property that will cut your annual property taxes by between 60-70% off. Here's the math:

$1M price

Annual property taxes w/o Mills Act: $12,500/year, or $1041/month. Yes, that's like a quarter of your mortage or more.

Annual property taxes w/ Mills Act (assuming 70% off): $3750/year or $312.50/month. Think of all you can do with the $728.50/mo you'll save. Or in a lump sum, that's $8742/year. That's a vacation. Or a new Viking stove. Or nearly all your HOA dues paid for. 

The Beauty of a Loft

The blank slate. The creative flexibility. The live/work aspect. And so much fun to re-imagine.

There's a reason why lots of creative people love the loft space. They're not confined to a finite layout--there are many possibilities to make the space your own without having a space defined for you.

1.

In a traditional house, the layout is what it is. Sure, you can convert the dining room into an office, but then you don't have a dining area. Or maybe you want a larger living space and one less bedroom, but the structural walls won't allow for this without major construction.

A loft gives that flexibility for creative vision. This is why you'll often see lofts become drastically different when they move from owner to owner. It might be 2 bedroom loft in one life, and then an open plan art studio or showroom in the next life.

2.

Then there's the general drama of a loft. The tall ceilings, concrete pillars, barrel ceilings, exposed brick, massive windows. 

3. 

The live/work status of most lofts. You might have an owner use their loft as a photography studio, or design space, or a dual live/work showroom, or just live in it. The flexibility of zoning as "live/work" adds value and a larger audience pool for buyers as well as renters.

4. 

And of course the building itself, which often has an interesting history. Maybe it was converted from a toy factory, department store, or old bank building. 

Rates Up, But Prices Still High?

When rates go up, normally, prices start barreling down. But prices haven't gone down much at all. This is because there's not as much housing available to go around. When you see areas that have some more price softening, you'll see that the areas have more housing inventory. 

One thing is for sure, there are some deals to be had out there as the multiple offers are starting to go away, and price drops have increased and days on the market are also increasing about about 10 days compared to the same time last year.

Some interesting deals right now in DTLA based on Price/SF, rare corner, Mills Act, layout, etc:

Cornell Loft #704 - $465K - L-shaped layout, parking, massive windows, Mills Act

https://www.themls.com/mlslistingphoto/listing/slideshow/#/24-374153

Bartlett Loft #1304 - $465K - 14" ceilings, Mills Act, exposed brick, north facing

https://www.themls.com/mlslistingphoto/listing/slideshow/#/24-347225

Eckardt #504 - $489K - Parking, soaring ceilings, Mills Act

https://www.themls.com/mlslistingphoto/listing/slideshow/#/23-313901

Eckardt Loft #403 - $475K - Corner orientation parking, Mills Act

https://www.themls.com/mlslistingphoto/listing/slideshow/#/24-348103

Rowan Loft #816 - $550K - Rare corner with coveted park views, Mills Act

https://www.themls.com/mlslistingphoto/listing/slideshow/#/24-372451

Textile Loft #1002 - $595K - Parking, storage, corner orientation for stunning views, Mills Act

https://www.themls.com/mlslistingphoto/listing/slideshow/#/24-373185

EVO #402 - $599K - 2 bathrooms, luxury amenities, parking

https://www.themls.com/mlslistingphoto/listing/slideshow/#/24-375881

Eastern Columbia #307 - $810K - Massive 14' ceilings, coveted south facing, EV Charger, Mills Act

https://www.themls.com/mlslistingphoto/listing/slideshow/#/24-374437

Eastern Columbia #603 - $900K - Massive double unit, 2250sf, Mills Act, storage unit, parking

https://www.themls.com/mlslistingphoto/listing/slideshow/#/24-372451

Skid Row's Latest Housing Project to Transform a Parking Lot

On 6th and San Pedro, in the middle of Skid Row, more housing to be constructed and a surface parking lot to be built on. https://la.urbanize.city/post/weingart-center-tower-rise-600-s-san-pedro-street-dtla

Best Time to Buy - When Rates Are High, When Market Crashes, 20 Years Ago

If you can't see that a market has crashed, or can't stomach rates that have doubled since last year, and missed the boat 20 years ago, then you're not ready to buy, and may never buy.

But fortune favors the brave, because those who bought back in the 90s when rates were about 8.5%, were rewarded very handsomely whether they sold at the 2007 height, or kept the property, refinanced in 2005, then again in 2021, or ended up selling in 2021-2022 and used those doubled profits to buy a house of their dreams with a huge down payment in 2024. So while it's difficult to time the market exactly, you can indeed "play" the real estate market and win.

NAR Settlement - Several Changes in the Real Estate Industry

 News that will affect the real estate industry is happening--largely affecting the buyer's side of things. This is all subject to court approval, and could take months to go into effect. 

The main takeaways are:

• Listing agents can no longer offer buyer's broker compensation on any MLS boards
• Buyer's Broker compensation offers can still be made (Meaning offers may be made to seller asking for Buyer's broker compensation)
• Buyers must now sign a Buyer's Rep form with an agent before any real estate activity is done
• Commissions will continue to be negotiable via contracts and Buyers may ask Sellers for their Broker's compensation

The new laws are not yet set in stone but expected to go to into effect in July 2024, but more details to follow as things solidify, get modified, added, deleted, etc.

I have to ask, is this any different from how attorneys operate? Or a CPA? Or if you hire any specialist? 

How will this affect all sides? Some possible scenarios:

• Buyers may be hurt the most because on top of the high real estate prices, they're going to have to pay for a buyer's agent if they want representation (this is basically how it's worked in NY). Of course buyers don't have to use a buyer's agent at all, but then buyers will likely pay more for the house because there won't be negotiating done on their behalf. 
• Sellers and even seller's agents can choose to pay buyer's agents or not. This will become a negotiating point but will likely continue to remain competitive. 
• VA and FHA loan buyers will likely lose out the most because they won't have the extra funds to pay for a buyer's agent.
• Sellers could end up with less buyers because many buyers won't be able to afford to pay a buyer's agent. 
• Sellers may still have to pay a buyer's agent to remain competitive in a slow market.
• Commissions may be allowed to be listed on non-MLS websites.
• Buyer's agents and buyers may only want to buy properties in which a Seller is offering compensation the buyer's agent, so that the buyer doesn't have to pay the buyer's agent.
• Listing agents may be asked to draft offers for buyers, but again, a buyer's representation agreement is now mandatory.
• More buyers may pay for and hire an attorney to draft up an offer. 
• Property values likely won't change much if at all, with extra being charged to the buyer.
• Buyers will scramble to buy before July 2024 to avoid the possibility of paying a buyer's agent
• Who pays the buyer's agent, if any are involved? Seller, Buyer, or BOTH. No longer is it being offered by the listing agent.

Be Ready Now, Don't Start Getting Ready

Whether you've decided to sell or buy, one of the most important things in this market is to be ready to go NOW. Not "about to get ready" or "planning to get ready". By then, it will already be too late. 

Buyers who are ready with a preapproval or proof of all cash funds are able to make an offer the moment they see something they want to buy. So many buyers lose out on great propertie because they're not ready with their documents.

Sellers too, who should be listing at an opportune window, miss out on busy buying months just because they didn't hustle to remove clutter, paint that living room, or repair the front door dent. These things matter, and the sooner you get it ready, the better.