Mortgage Rate or Sales Price -- Choose One

In just about any market, you have to choose between a low interest rate and a high price, or a high interest rate and a low price. It's just the way of housing supply and demand.

Between 2020-2022, the interest rates were low, but prices were astronomically high. We're talking overbidding by 25-30% in some cases. Ridiculous--just to get a rate that you're going to refinance down the line, pay off or end up selling before the 30 years is up? The wiser thing to do is to buy at a discount and refinance later. 

You buy a property worth $1M for $1.3M, at a 3% interest rate. You're paying nearly $3750 a year more on property taxes.

You buy a property worth $1M for $950K, at a 7% interest rate. You're paying $4375 LESS a year in property taxes, and also get a tax write-off on the mortgage interest, so you end up paying about the same (or less per month if you put a bit more down to offset) as the $1.3M house. Not only that, you'll end up refinancing when mortgage rates drop, or having enough equity in the shorter term future to cash out or trade up. 

“Outperforming the majority of investors requires 

doing what they are not doing.” 

- Sir John Templeton

Buying Now Means Holding for 5 Years

Despite interest rates near 8%, prices have not come down much. If you're going to buy now, expect to hold for at least 5 years.

As they say in real estate, "the best time to buy real estate was 5 years ago."

Rare Opps + Deals in DTLA

1100 Wilshire #2610

680sf - $559K

5 Parking spaces, yes, 5 reserved spaces come with this 1 bed/1 bath loft-style condo with spectacular city views. Building has it all: rooftop deck, pool, panoramic views, hot tub, outdoor dining, gym, media room 24/7 front desk security, dog run, etc. 

849 S. Broadway #307

Eastern Columbia Lofts

1110sf - $849K

Rare balcony unit and 14'+ ceilings. This spectacular Art Deco building has it all. Rooftop pool, 24/7 security, Gym, lobby, courtyard, and Mills Act tax savings. 1 parking space w/ EV Charger

1111 S. Grand #613

Elleven Lofts

930sf - $595K

Beautifully maintained east-facing loft with dedicated parking space w/ EV Charger, rare valuable deeded storage unit.

Insurance Companies Not Insuring in California

Scary, but a few large insurance companies have pulled out of California due to all the wildfire disaster and other disaster claims. Allstate and State Farm for starters.

Allstate no longer offering new policies in California due to wildfires, other costs (msn.com)

State Farm will no longer insure new homes in California, company says - ABC7 Los Angeles

What does this mean? It means when you're buying a home, you need to shop around for home insurance early, like as soon as an offer is accepted, you need to start getting quotes on the property to make sure it's insurable.

The Deals are in Condos

Houses are still...very...expensive. There are still multiple offers. There are still hardly any contingencies. The talk about sellers agreeing to buy down your mortgage--largely isn't happening in LA. It's still a seller's market for single family homes.

Condos, however, are still not caught up to SFRs in terms of price or bidding activity. You are still able to get deals on condos. And the amazing thing is that condo rentals are thriving. Rents are high with condos right now, well up from pre-pandemic levels especially if the condo has some amenities, parking, etc. Which is why cash investors are coming out of the woodwork. 

Real Estate is Up, If Anything

Interest rates are up, there's a war that could expand, there's been banking failures and likely more to come, yet real estate is holding on. Why is that?!

There is absolutely no doubt the first reason is inventory. There just isn't enough. When you have more homes that have sold than are on the market, that's very telling. Santa Monica has 39 homes for sale under $5M right now and 38 sold in the past month. Culver City has 8 for sale and 12 sold in the past month. West Hollywood has 16 active and 22 sold. Pasadena has 94 active and 171 homes sold. There just aren't enough homes compared to the demand. On the flipside, DTLA has 192 for sale and 83 homes sold, so now you know where there are deals to be had.

The second reason prices are still going up is safe haven aspect of real estate. Unlike the volatile stock and crypto markets and low yield treasuries, real estate is very malleable. You can rent out, update, flip, etc. And those who need to park some of their money are putting some of it in real estate.

Lending is going to get worse. If you think this banking thing is over, it's not. Banks will be under more scrutiny, and will be lending less. 10/90 loans will likely be hard to come by. Most conventional banks will want to see at least 20% down for buyers. So anyone holding onto their nice 2.9% loans is likely gonna just stay put. And why put your house on the market when you can just Airbnb the house, rent it out, or add on to it if you need the size?

To Sell Now, You Have to Step It Up

DTLA is a tricky market. First you have to love the city life. You have to love a little grit and the excitement of an ever-evolving area. Think Brooklyn before what it is now. Among brand new skyscrapers and stunning penthouses, you have vintage lofts, the highest concentration of old turn of the century buildings, and a Walkscore of 98. And Union Station where all metro lines meet. There are pop-up art galleries are happening all the time. You have some of the best small restaurants that were born in DTLA, like Sonoratown, Bestia, Factory Kitchen, Maccheroni Republic and Eggslut. And the audience is hip, eclectic, hate "normal" and love community. 

So what to do to sell your place when the real estate market is picking up, but the momentum is still not quite there yet? You have to step it up.

Some things you should be prepping before going on the market

1. Staging. Duh. Especially with open plan lofts, you have to stage it because a lot of people don't seem to know where a bed goes, or where to put a sofa in a rectangle room.

2. When staging, try to go very minimal, neutral, and organic. Meaning light and soft colors like beiges, whites, light browns. Put an-off white throw blanket over a dark sofa. Get a light colored rug to cover up dark floors. Get rid of the polkadots drapes, etc.

3. Declutter. Just hide it away. It's ok to have your cabinets stuffed with things, but please just hide it away. Rent a storage space if you need to.

4. If you can, hide personal photos, religious objects, trophies, wall plaques, suitcases, sporting gear and shoes. 

5. Swap out lighting. No more silver IKEA track lights please. Just pick out something modern, you can get a nice looking pendant on Amazon for under $100. 

6. Ensure windows are cleaned. They should be spotless for showings. It matters in a condo/loft as it's the only outdoor visual one gets in a building, so clean the windows.

7. Update bath and kitchen fixtures. Just spend a couple hundred on a faucet and showerhead. It makes a difference.

Some Amazing Move-in Ready Mills Act Lofts for Sale Right Now

Eastern Columbia Penthouse #1210

2+3, 3320sf

Largest 4-level trophy penthouse! Amazing views, walk out to the pool deck. One owner and finally on the market. - The Agency, Kevin Dees

$3.699M

Eastern Columbia #511

1+2, 1740sf

Spacious and stunningly remodeled corner loft with a Scandi aesthetic. Features a rare private balcony. - Coldwell Banker, Yuri Huxley

$1.475M

Rowan #104

2+2, 1140sf

Fantastic 2-story loft with rare ground level roller door access. Ideal for filming, art studio etc. - Coldwell Banker, Tracy Do

$850K

Textile Loft #901

2+2, 1370sf

Bright and airy corner loft with windows galore. A true historic loft with amazing views. - KW, Peter Buoncore

$795K

Cornell Loft #301

0+1, 800sf

Gorgeous open plan studio loft with tons of natural west-facing light. - The Agency, Alice Cannington

$499K

Cornell Loft #302

1+1, 740sf

Beautifully preserved historic 1 bedroom with massive concrete structural walls. - Coldwell Banker, Yuri Huxley

$459K

COMING SOON - Eastern Columbia Loft - Lux Minimalism

Massive 1740sf loft. Featuring a stunning main bedroom with ensuite that feels like a spa.

Plus a guest bathroom, a Scandinavian-inspired kitchen, and a corner orientation with a rare balcony. 2 parking space privileges.

A beautiful urban sanctuary. 

Price and showings upon request.

310-869-2655

Cutest 1 Bedroom Loft in the Fashion District! - Cornell Loft #302 - Asking $459K

 

Can we say adorable? 740sf loft, a true 1 bedroom 1 bath with massive closet. The unit features all Bosch appliances throughout the kitchen, plus a Bosch W/D in the bathroom. 1 Parking space include. And Mills Act too. Asking $459K

OPEN HOUSES:

3/25 & 3/26 from 12-3pm

Cornell Loft

746 S. Los Angeles St #302, 90014