Moving to OC? Maybe you’re relocating cities within Orange County? Whether you’re coming in from out of state or out of the country, or you’re just moving to a new city, it’s important you know who your providers are! Click here to get a breakdown by city.
It’s no secret renting is getting increasingly expensive. As of June 2018, rents have gone up another 5.8 percent year-over-year. That’s 1.1 percent greater than the 4.7 percent increase last year and the largest increase of any month since January 2008!
The US Bureau of Labor and Statistics CPI tracks rental costs by polling consumers vs other measurements from landlords. Between 2009-2014, this CPI tracked a yearly increase of 1.7 percent.
It begs the question rent or buy?
Sure, renting is a fixed cost but you don’t gain from the equity in owning a home. You do, however, have the ability to move at the end of your lease, which gives you mobility should circumstances change in the future. That said, an owner can also terminate your lease at the end of a lease term which can be rather inconvenient.
Owning a home comes with unexpected costs. Whenever a major system or appliance fails in the home, it’s on you to fix it and that can cost a pretty penny. However, each month your payments go towards paying down your mortgage and provides you equity with which you can leverage for future purchases, remodeling, etc.
In owning a home, you have the security of knowing that you will always have your home to live in and, should you need to leave, you can always rent it out. The initial investment is much higher with purchasing vs renting, however, a common misconception is the 20 percent rule. To buy a home, you do NOT need a full 20 percent down. In fact, financing options allow you to put as little as 3 percent down.
Something important to consider, though, are closing costs. In purchasing a home, you can typically bank on paying anywhere from 0.5-1 percent of the purchase price in closing costs – sometimes more. That is above and beyond the down payment and an important chunk of change to factor in when considering buying.
When renting, personalization is limited. You are living in someone else’s home which means you may be restricted from painting walls, changing window coverings, or any other personal touches. Owning a home is like starting with a blank canvas. You can do with the home as you please (within reason, of course).
Lastly, owning a home offers tax advantages. That said, you also must pay property taxes, an expense that is not incurred when renting.
Ultimately, only you can decide if buying or renting is better for you. Renting does allow for a lot of flexibility in some regards but it also has its restrictions. If you are happy renting or waiting until you have all four financial ducks in a row, we offer a number of great properties for lease. From high-end single-family homes to 1-bed condos and everything in between. Check out our available inventory here. If you’re considering owning a home, we can help with that too! We are known for our distinct strategies that average our buyers a net savings of 6 percent on the value of their new home! Click here to learn more.
OR call our 24/7 recorded hotline toll-free – 877-957-6677
U.S. single-family rent is up 2.9 percent year-over-year as of March 2019 and there are no signs of slowing. The CoreLogic Single-Family Rental Index (SFRI) measures rent growth among single-family rental homes (including condos and townhomes), which provides us this data. They use a repeat-rent analysis to measure the same rental properties year-over-year.
Beginning in 2010, single-family rent rates began to climb and they haven’t stopped since. Of course, higher-end rental properties are affected less by the increase, an average of 2.4 percent compared to 3.5 percent for lower priced rental homes. While rent growth does vary greatly over different areas, the greatest increases being in metro areas, rent rates have been and continue to be on the rise.
With rents where they are, it’s a great time to lease your home. If you’re considering downsizing or, maybe, upgrading, and can keep your asset and lease it, now’s the time and we can manage it for you. Many homeowners end up selling because they don’t wan to deal with the hassle and stress that comes with managing a rental property. They’d rather sell and take the proceeds. While walking away with a few hundred thousand in cash does sound appealing, take a second look at the equity in your home and see if you can purchase your replacement property using the projected rental income of your current property. Over time your appreciating asset will not only bring in more than what you owe, but it can be part of your retirement plan later on down the line.
Unsure where to start? Contact us at 877-957-6677. We manage over 60 properties in Orange County with a belief in full and total transparency. Not only are we full-service, but if you buy your replacement property through us, we’ll manage your property for the first year FREE of charge!
Kurt Galitski Property Management – 877-957-6677 – KurtPropertyManagement.com
Rent inflation in Los Angeles & Orange counties is at 5.4%, a 12-year high. This is the highest April reading since 2007, when the rate was at 6.4%. Rent inflation in L.A. and Orange counties ran at a 12-year high in April.
The U.S. Bureau of Labor Statistics’ Consumer Price Index for the 2 counties shows the cost of local renting was up at a 5.4% annual rate in April vs. 5.1% a year earlier. The CPI tracks rental costs by polling consumers vs. other rent measurements that come from surveys of landlords. So far this year, this L.A.-O.C. rent index rose 5.6% compared with 5.2% in 2018 and 4.9% in 2015-2017. Between 2009 and 2014, local rents rose on average 2.5% a yr.
Local rents have surged as vacant apartments became more scarce during an economic recovery that’s created 1.19 million jobs and nowhere near enough housing options in Southern California since 2010. Housing eats up the biggest share of local household budgets. By CPI math for April, overall housing costs in L.A.-O.C. rose 4.6% in 2018.
Overall inflation in L.A. & Orange counties was rising at a 3.3% annual rate in April vs. (1) 2.7% a month earlier; (2) 4% a year earlier; (3) 2% nationally; & (4) 2.9% in Western states. Without the cost of shelter, local inflation would be at a 2.3% annual rate. So far this year, L.A.-O.C. averaged a 2.85% inflation rate. Last year, inflation rose 3.8% in the two counties, according to the index.
In 2009-2017, inflation averaged 1.4% annually after running 3.4% in 2000-2008. The CPI for Riverside & San Bernardino counties showed an inflation rate for March at a 2.8% rate.
Here are eight other L.A.-O.C. inflation trends you should be watching …
1. Gasoline cost 10.8% more in the last 12 months, by CPI math. Household energy cost 0.9% more.
2. Food costs rose 2.2% in a year. Eating out expenses rose 5.0% ; food-at-home fell -0.4% in 12 months.
3. Medical bills were rose 0.9% in the year.
4. Costs of all services were 4.1% above a year ago.
5. Apparel prices were -3.3% lower in the year.
6. The cost of big-ticket “durable goods” (such as appliances and furniture) were -0.2% lower over 12 months.
7. Big cities in Western states saw consumer prices in April up at a 3% annual pace. Smaller Western cities? 2.7% inflation rate.
8. Elsewhere in the West: Bay Area inflation? 4% while Seattle had 2.4% and 2.3% for Phoenix
Gov. Newsom signaled on April 24, he wants to sign a housing “affordability law” just after a controversial rent control proposal cleared its first committee in the Legislature.
He released his statement hours after a bill that prohibits landlords from raising rent by more than 5% above the Consumer Price Index passed the Assembly’s Housing & Community Development Committee by a 6-1 vote.
Critics say Assembly Bill 1482 could upset market stability, stymie development, and financially hurt property owners. California voters in November rejected Proposition 10, a statewide rent control initiative. However, the bill’s author, Assemblyman Chiu, D-San Francisco, said lawmakers must act to protect renters from “egregious rent increases” in the future.
The night before the committee hearing, Newsom’s chief of staff Ann O’Leary talked with rent control supporters & people struggling to afford rent in the lobby of his offices. She said Newsom told lawmakers he wanted the Legislature to work toward a legislative deal to help California renters.
Opponents showed up in force, too. Those against AB 1482 included landlords, small property owners, and multifamily housing residents who called the proposal an “ill-conceived housing-killer bill.”
While campaigning for governor, Newsom said he opposed last year’s rent control measure, but Newsom has also said he supports expanding rent control in theory and wants the Legislature to craft new laws.
A companion rent control bill, Assembly Bill 36, was pulled by its author, Assemblyman Richard Bloom, D-Santa Monica, ahead of the hearing. Bloom’s legislation would have reformed the Costa Hawkins Rental Housing Act, a law preventing local governments from imposing rent control on apartments built after 1995.
With spring in the air comes the opportunity to appeal your property taxes. Not everyone needs to do this and, of course, you should weigh the costs vs the payoff, but if it can save you thousands, it may be worth the fight. If you feel like your most recent tax assessment was abnormally high, that may be because it was. Sometimes incorrect information on your tax records can negatively affect your property tax assessment.
In fact, one of the most common reasons properties are improperly taxed is due to incorrect information. Problems may arise when a property is listed with more square footage, bedrooms, or land size than there actually is. Older homes particularly struggle with this problem because of the number of people that have had their hands on these records. The more these records are updated and passed along, the easier it is to see 2300 square feet be transposed to 3200 square feet. The key to successfully fighting your property taxes is to know what your tax assessor thinks. If the assessor’s office believes there to be extra square footage that definitely does not exist, it shouldn’t be a difficult battle to win.
An important item to note is the time period in which you have to appeal. Each county has its own window; you can’t just appeal on a whim. You’ll need to pick up the phone and make live contact with your tax assessor because only they are the ones that can tell you about any changes in the way taxes are being handled that year and what deadlines you’ll need to meet.
Keep in mind, certain people have earned the right to reduced property taxes. A few ways you might already qualify for an exemption are:
Homesteading – in some places, simply living in your home is reason enough for an exemption.
Seniors and disabled people – many high tax areas specifically have rules protecting seniors and the disabled.
Veterans – Vets who have surved during wartime often qualify for a property tax exemption (provided they were honorably discharged).
Remodeling – some areas are willing to let you work your way to an exemption.
Green housing – some (environmentally-friendly) areas will happily exclude the value of your green improvements from your tax assessment.
So what if you don’t qualify for an exemption and you haven’t found any errors in your tax records, but you still feel your tax bill is unreasonably high?
You can still fight. Be advised this is a much more difficult war to wage and you’ll need to come armed with a current appraisal, comparative market analysis, and documentation of any damage done to the home since the last assessment.
Once you’ve submitted and/or presented your case, don’t expect an answer right away. This is the government we’re talking about. Be prepared to wait several months before hearing an answer. Keep copies of all documentation provided and hold on to your patience. Keep in mind, what you’re appealing isn’t your tax rate; it is the assessed value of your home. The same tax rate applies, just to a lesser valued property. So while this may help you pay less in taxes, it can also hurt your ability to sell your home or refinance.
Though affordability has been the largest obstacle for renters seeking to be homeowners here in Southern California, we shockingly discovered that 14 percent of renters actually can afford to buy a home they just lack the financial knowledge to do so. According to the California Association of Realtors, of the 6 million California renters, 826,000 could qualify to purchase a median-priced home within the counties they reside in.
Unfortunately, a lack of financial literacy has been their greatest barrier to entry. In a poll, nearly 75 percent of renters believe a down payment must be a minimum of 20 percent. They are entirely unaware of the fact that other mortgage programs exist in which they can put as little as 3 percent down. 69 percent of renters said they would buy if they could put less than 20 percent down.
These numbers are astonishing! Yes, affordability has caused the American Dream to fizzle for many, but it’s not entirely dead. Nearly 70 percent of renters in California still want the pride of homeownership and the sad part is, they don’t even know that it is attainable. Over 800,000 renters make enough income and have good enough credit to qualify for a mortgage with a lower down payment, but because of their misconceptions of what it takes to buy a home, they have not even looked into it.
Prospective first-time buyers should be aware that there are many different loan options out there, many of which allow for far-less than 20 percent down and some even offer down payment assistance. If you’re currently renting and unsure if you qualify, step one is to contact a trusted agent who can connect you with a reliable mortgage broker. They will shop different loans for you to find you the most suitable program that meets your needs and down payment abilities.
We all know that the Millenial and Gen Z generations are prolonging their leasing years, but did you know more seniors are also choosing to rent? Data from RentCafe shows seniors are renting at rates exceeding younger generations! It showed that in the last 10 years, the number of renters ages 60 plus has increased 43 percent.
While the median age for renters is still younger than their owner counterparts, renters ages 60 and over grew to 9.37 million in 2017, outpacing their younger counterparts. Older owner households grew only 31 percent compared to the 43 percent increase in older renters.
What does this tell us? Well, we do know that this trend is across the board. Older owner households are increasing at a faster pace than younger owners and here’s why. Two words…Baby Boomers. With Baby Boomers now in their 60’s and most of them empty-nesters, they are downsizing. Either they are selling and buying smaller or renting. Homeowners ages 34 and under saw a decrease of 19 percent while owner households between the ages of 35 and 59 only decreased 12 percent.
It’s safe to say that as the older generations are losing their enthusiasm about homeownership, the younger generations are losing their value in the out-of-reach “American Dream” and this has therefore resulted in a surge in rental prices.
Wednesday’s ruling by a 3-judge panel of the 9th Circuit Court of Appeals is a setback for the home-sharing platforms in their effort to avoid regulation by cities. Cities blame the rapid proliferation of short-term rentals for a shortage of affordable housing & disintegration of residential communities.
The Santa Monica ordinance holds home sharing companies are legally responsible for the booking of rentals residences not licensed by the city. Editor’s Note and “in plain English”: In the past home-sharing companies have sought to claim immunity from prosecution for violations of city ordinances restricting home-sharing. Instead they shrugged their shoulders & tried to pass responsibility to the home owners.
That’s appears to be about to change – particularly in California which is in the 9th Circuit Court of Appeal’s jurisdiction. The court agreed with the city that the restriction doesn’t violate the U.S. Communications Decency Act of 1996, which shields online services from liability for the content that their users post on their sites.
In January, Airbnb and other short-term-rental sites won a ruling granting a temporary reprieve from a New York City law that compels them to turn over renter data, a requirement threatening to cut bookings in the city by half. Airbnb is also fighting in Paris, where it faces as much as $14 million in fines for allegedly posting illegal advertisements.
The courts’ interpretation of the 1996 law and the protection it affords”interactive online businesses” have become a central theme in legal challenges to Airbnb and its rivals. Federal judges in Los Angeles and San Francisco have found that cities can hold the companies liable for processing transactions, as opposed to simply listing information from users.
Airbnb and HomeAway argued the Santa Monica ordinance makes it impossible for them to operate, particularly if other municipalities adopt similar laws, because it would require them to monitor and remove listings for unregistered residences. If they don’t, users would be stuck looking at listings that they won’t be able to book, according to the companies.
The 9th Circuit panel concluded that Santa Monica’s statute puts only an“incidental” burden on the companies’ constitutional right to free speech. “Even assuming that the ordinance would lead the platforms to voluntarily remove some advertisements for lawful rentals, there would not be a ‘severe limitation on the public’s access’ to lawful advertisements.
Santa Monica said in a statement “the unanimous ruling confirms the city’s right to regulate home sharing to protect its limited housing stock for residents”. “This is a big win for Santa Monica residents and our residential neighborhoods.”
Meet Kurt Galitski Real Estate Group.
We are pleased to announce Five Star award winner Kurt Galitski’s appearance in Forbes magazine in a special section for February 28, 2019. By earning this honor, Kurt has shown an outstanding commitment to clients. Please look for Kurt in Forbes magazine, and offer your congratulations on this recognition. The Five Star Real Estate Agent award is based on objective research criteria. Five Star Professional’s research team evaluates candidates from across major markets annually on ten criteria associated with outstanding service. Each of our award winners has shown a commitment to clients, strong industry credentials and has been evaluated on the quality of his or her practice. Kurt Galitski has met these criteria and has been honored with the Five Star Real Estate Agent award.
Jonathan Wesser | VP, Operations Five Star Professional