|Home sales slump across Southern California
|“Home sales across Southern California have fallen precipitously, with the number of deals down by almost half.Buyers closed on 13,201 single-family homes and condos in April, down 46 percent in a year, the Orange County Register reported, citing figures from CoreLogic.It was the third biggest, year-over-year drop since records began in 1988.The wrench in the machine is high mortgage rates, with the local housing market seeing its slowest-selling April in 35 years. It was also the 18th-worst sales month total on record. Across the region’s six counties, sales in San Bernardino were down 68 percent, Ventura 59 percent, San Diego 52 percent, Los Angeles 39 percent, Orange 35 percent and Riverside 39 percent, according to the Register.In the year that ended in April, 182,593 Southern California homes changed hands – the lowest 12-month total since the 2008 market crash. Only seven other similar periods – all during the 2007-08 market crash – had fewer sales.”
Study finds it takes nearly four years to build apartments in LA
“A new study has found that the average finished multifamily project in the City of Los Angeles takes 3.9 years from its first application to completion.
Developers have complained for years about the slowness of approvals, and the study seemed to confirm it.
“The City of Los Angeles is in dire need of more housing,” the study’s authors wrote. “Yet, the city’s housing approval and development process is long and complex, leading to added costs and a high degree of uncertainty among developers. Delays can occur at every step of the process.”
The study, published last week, came from the Los Angeles Business Council Institute (LABCI), an arm of the well-known pro-business policy group whose leadership team includes executives from Rexford Industrial and Trammell Crow Company. The research was conducted by Edward Kung, an economics professor at California State University Northridge, and Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate. “
How the debt ceiling crisis could rile the residential market
Lawmakers are deep in negotiations — without much promise — as the U.S. nears the June 1 deadline to avoid an unprecedented default on its national debt, which players in residential real estate are predicting could spell turbulence for the housing market.
A default on the national debt would rock the yield on 10-year Treasury bonds, which are closely correlated to mortgage rates. And as is sometimes the case in markets, even the threat of disaster can spell, well… disaster.
“If we really get right up into the eleventh hour, and it’s looking like a real possibility, then those jitters could enter long-term debt markets,” Zillow’s Jeff Tucker told Barron’s, referring to mortgage rates and the 10-year Treasury yield.
If the deadline passes without an agreement, that could be a haymaker for a housing market already struggling with high rates and high home prices, with Zillow estimating it could lead to a 23 percent drop in home sales.
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