Commercial Real Estate in 2016 – “Sustained job growth throughout the country and improving credit conditions are forecast to help keep commercial real estate activity expanding into next year …”
Commercial Real Estate in 2016:
Commercial Market Forecast
So, what can we expect of Commercial Real Estate in 2016? Most analysts have released their commercial market forecasts for next year, and they generally agree that we should see continued growth, but that prices may pull back a bit.
We’ve seen sustained job growth in all areas of the country, and credit conditions are also improving. Both of these have sustained and driven the commercial real estate market, along with the activity of foreign investors. NAR analysts are expecting continued moderate growth, but say that prices may pull back in major areas that have reached their peak. Foreign investors, who have been at the root of rising prices in many areas … like Southern California … are currently being seen to become interested in more moderately priced areas, such as those in the mid-west rather than the west or east coast. That change of focus, combined with expected rate hikes by the Federal Reserve, should work together to pressure prices in “topped out” markets downwards.
Some analysts cite economic forces that have held growth back a bit, but most agree that growing employment will pressure vacancy rates down. The only exception to this may be in the multi-family sector as large construction projects in the pipeline reach completion over the next few months, and the availability of units rises.
Here is a comprehensive breakdown by Adam DeSanctis of the National Association of Realtors
Moderate Expansion, Easing Prices Expected for Commercial Real Estate Markets | National Association of Realtors
“Even though rising occupancy and rents will continue, property prices are forecast to decline slightly in 2016 as the Federal Reserve starts to raise interest rates. With cap rates already compressed to very low levels, Yun anticipates short-term rate increases in December, and then again in March, which could slightly temper market growth. However, investments are still expected to continue on an upward trend.”
Southern California Commercial Real Estate in 2016
The Southern California Commercial real estate market is one of those that has been pressured by the foreign investor and is a prime candidate for the future action described in the NAR report. Expect continued, moderate growth with falling vacancy rates but possibly lower prices.
Happy New Year!
Commercial Real Estate in 2016
San Gabriel Valley Christmas Light Displays – Here are a few links that will get you up to speed on all the best Christmas light displays in the San Gabriel Valley and all around Southern California!
San Gabriel Valley Christmas Light Displays
From Altadena, San Marino, and Pasadena Thoughout All Of Southern California … Christmas Light Displays Are Everywhere!
In a change of pace kind of post today, we’re not going to be talking about real estate values or anything like that. It’s the Holiday Season, and whether you celebrate Christmas, Hanukkah, Kwanzaa, Yule, or Festivus, taking the family to visit one or more of the various Holiday Light Displays around the area is one of the enjoyable perks of the season.
With that in mind, here are a few links that will help you locate a great display near you. These cover our local San Gabriel Valley Christmas light displays, but they also include information on displays all over the Southern California region. From Orange County to Santa Barbara, you’ll find something in here that’s convenient for you and your family.
I remember growing up in this area, one of the highlights of our Christmas Eve was piling into the car and heading to Hasting’s Ranch, Altadena, and San Marino to see the lights. Here’s hoping you and your family will have a great Holiday celebration.
This one is information from 2012, but it should still be good. It concentrates solely on the San Gabriel Valley
This information is quite current, but it focusses only on the Pasadena, Altadena, and San Marino areas.
This is very current information and contains Holiday Light displays all over Southern California.
2015 Best Holiday Christmas Light Displays & Tree Lighting Ceremonies in Los Angeles & Southern California | Santa Clarita Guide
This is our most current and comprehensive list. It contains information about all the displays in the San Gabriel Valley and all around Southern California.
Merry Christmas and Happy Holidays!
This will be our last post until after Christmas. We would usually be posting on Friday, but that will be postponed because of the Holiday. We will make up for it with a Special post this coming Saturday. Until then, all of us here at BrionCosta.com wish you and yours a very Merry Christmas and the happies of Holiday Seasons!
San Gabriel Valley Holiday Events – “Celebrate the Season at Kidspace! Break out your mittens, boots, and snow hat for a day of winter wonderland fun! …”
San Gabriel Valley Holiday Events:
Snow Days At Kidspace Children’s Museum
Snow Play Without Leaving The San Gabriel Valley!
Today we’re highlighting one of the most family friendly of San Gabriel Valley Holiday Events: “Snow Days” at the Kidspace Children’s Museum.
Would you like the little ones to experience the joy and fun of a “White Christmas”, but don’t have the time for a trip to our local mountains? Well, here’s a great solution! For 5 days, Dec. 26-30, Kidspace Children’s Museum in Pasadena is bringing the snow to the San Gabriel Valley!
Kidspace Children’s Museum is a “learning center” dedicated to “hands on” learning for kids. They have wonderful programs and camps goping on all year long, but “Snow Days” is really very special. It’s really a memorable treat, especially if your little ones have never seen or experienced snow up close. What better way for the munchkins among us to celebrate the Season than a day experiencing snow play right here at home.
You can find all the information on the Kidspace website. This is an experience the little ones won’t soon forget! Have fun!
“Play in real snow, build a snow family, perfect your snowball making skills, and make snow angels. There will also be snow and winter themed activities throughout Kidspace. See full list below …”
Read More Here: http://www.kidspacemuseum.org/events/event-list/snow-days
San Gabriel Valley Holiday Events.
Southern California Home Sales – “The luxury market was the first to recover from the housing downturn, and now it’s a bellwether of slowing price growth for the rest of the market. Sales at the top end of the market continue to soar, but prices are downshifting …”
Southern California Home Sales:
Luxury Home Prices Fall Nationwide
Southern California Home Sales Are Among Most Drastically Effected
This week we’ve been taking a look at California home sales in 2015 and 2016. We’ve been highlighting how Southern California home sales have performed this year and what to expect from the California real estate market in the coming year. In general, we’re looking at a housing market that is growing in sales and value, but at a slower rate than before. In short, we appear to be experiencing a “rest” in the market. All in all, that’s a good thing.
There is one section of the California Homes for Sale market, however, that is not performing like the rest. Prices of Luxury homes fell during the 2nd half of 2015 for the first time since 2012. Over at Redfin, they have been analyzing this and have come up with some very interesting numbers. As you can see from the chart above, Los Angeles is among the hardest hit areas as far as falling prices of luxury homes.
There are several causes for this, and one is the slowdown of activity from foreign investors. Here in the San Gabriel Valley we’ve noticed a distinct pull-back of activity since the fall of the Chinese stock market and the crackdown of the Chinese government on money being invested overseas. With that slowdown, prices began to pull back in an effort to attract buyers.
Check out this detailed article by Alina Ptaszynski over at Redfin. We’ll conclude our analysis after the jump.
“Home prices in the luxury market fell 2.2 percent in the third quarter compared to last year, the first time prices for the nation’s most expensive homes have fallen since the first quarter of 2012. The luxury market, which we identify as the priciest 5 percent, was shown up by the bottom 95 percent, where prices grew 3.8 percent over the same period. The bottom 95 percent of the market has seen consistent price growth of around 4 percent in each of the past four quarters.”
Southern California Home Sales: Is Luxury Real Estate A Leading Indicator?
As I mentioned in earlier posts this week, there are a few … not many, but a few … analysts of the real estate market who are convinced that we are currently experiencing another “real estate bubble”, and that prices and activity are both about to fall. One of the things that they point to is the recent decline in prices in the area of Luxury homes. The upper end of the market has long been considered a “leading indicator” for the rest of the market. The top 5% market area was among the first to recover. Could this recent drop in prices among luxury homes signify a coming downturn in the rest of the market as well?
Personally, I don’t subscribe to the extremely pessimistic view of some. All markets adjust. No market simply moves upwards in a straight line. No market moves downwards in a straight line. Whichever way the market trend is going, there will be “retracements” and “market adjustments” along the way. What’s more important than these adjustments, is the trend itself. This market action among Luxury Homes is certainly a heavy adjustment, but it falls far short of signifying a trend reversal.
The Southern California Home Sales market … along with real estate in the rest of the nation … is on an upward trend. The fact is that Luxury Home prices had become very inflated and overblown by last June, and they have adjusted over the last few months. The rest of the market may be a bit overpriced, but not to that degree. Yes, we may see some adjustment in prices throughout the rest of the market over the next few months, but it’s not the bursting of a “bubble”. It’s not the reversal of the current trend. It’s the normal activity of a healthy market making needed adjustments, and after a brief pull-back the upward trend should continue.
Southern California Home Sales.
Southern California Home Sales in 2016 – “Most economists agree that housing prices and sales will continue to grow in 2016, just at a slower pace. Call it a slowdown, but not bad news. …”
Southern California Home Sales in 2016:
Five Predictions From Redfin
As we did in Monday’s post, today we’re presenting another set of predictions regarding Southern California Home Sales in 2016. These are a bit less specific to our own area here in the San Gabriel Valley. They come from the online real estate brokerage and analyst house, Redfin, and they are nationwide predictions. Even so, this 2016 Home Sales Forecast is likely what you’ll see in the Southern California home sales market next year, and it’s a mixed bag of news.
As with most analysts, the Redfin predictions do not forsee any “booming” going on. They are focused on the moderation of things in general. They find that the housing market, in general, will continue to grow, but at a slower pace than we’ve seen. This is actually better news for buyers. If the market maintains growth while moderating the rate of exchanges and the rise in prices, that’s good news for buyers, and indicates a healthy market long term.
Redfin’s 5 Predictions are:
1) Prices and Sales Will Grow 1/2 As Fast
2) Credit Will Ease A Bit
3) There Will Be More (and older) First Time Buyers
4) The Market Will Slow & We Will See Slower Closings As Well
5) Inventory Shortage Will Continue
The specifics of why Redfin is predicting each of these and just what effect the item will have on the market can all be found on the Redfin Blog post itself. This particular post was written by Nela Richardson, and she does a fine job of illustrating the “why’s and wherefore’s” of her 2016 housing market predictions.
“Next year holds a few interesting developments, some good for housing, some bad. Easier credit will bring in more buyers, but higher mortgage rates, continued low inventory and the wildcard of a presidential election will weigh down growth. All things considered, we see a fairly uneventful housing market next year.”
Southern California Home Sales in 2016: Slow and Steady
Our national and regional real estate markets have made a really dramatic recovery over the last few years. Dramatic recoveries create stress. As in any market, a “resting” period or a “retracement” becomes necessary. Buyers and Sellers look for a little “breathing room” where they can take a step back and not feel so rushed to get their timing right. This is the consensus of what we should expect for 2016. And it’s not completely unwelcome news. A “resting” market is usually a good indication of market health, and in the long run that’s good news for both sellers and buyers
It should be noted that not all sectors of the housing market perform the same. On Friday we’ll look at a sector of housing that’s not “hitting the marks” as well as the others. Since this sector is somewhat of a “leading indicator” of future general market performance, it bears looking into the reasons for its current under-performance. Join us for our next post where we’ll discuss the difficulties being experienced by the Luxury Home market these days.
Southern California Home Sales in 2016.
Southern California Home Sales in 2016 – “California’s housing market is expected to improve in 2016, but a shortage of available inventory and continuing high costs are expected to limit the improvement …”
Southern California Home Sales in 2016:
California Real Estate Market Predictions
It’s that time of year again, when the November numbers are all in and tabulated, and we’re close enough to the end of December that we can reliably start to forecast the direction of Southern California Home Sales in 2016. The California Association of Realtors has just released it’s annual prognostication of what the California real estate market will likely be like during the coming year.
The CAR report reflects the type of 2016 market forecast that most experts hold at present. In all liklihood we are looking at an improving market, but one that is advancing slower than before. There are several factors that may weigh on the market here in California and put a moderating influence on any faster improvement.
The CAR report itself is very dense and technical, of course. However, here’s an article by Ben Lane that just appeared on HousingWire.com. Ben gets to the heart of the matter and explains the bottom line of the report in a clear and easily understandable fashion. This is the essence of what we’re likely to see in the coming year..
“The state’s rising prices are predicted to hold back home sales slightly. The California median home price is projected to increase 3.2% to $491,300 in 2016, following a projected 6.5% increase in 2015 to $476,300. Despite those increasing prices, 2016 is still estimated to have the slowest rate of price appreciation in five years.”
Southern California Home Sales 2016:
Some Forecasters Are More Pessimistic
There are some out there who are making more pessimistic forcasts for the future of Southern California Home Sales in 2016. Although they are in the minority, they are basing their predictions on valid concerns. We’ll cover one of those forecasts in these pages this coming Wednesday, so stay tuned for that.
In the meantime, for those who really want to get “into the weeds” with the technical information in the CAR report and put together their own 2016 Home Sales Forecast, we’ve included a slideshow of charts and more detailed information below. These are the charts and graphs, along with some information pertinent to Realtors, that the California Association of Realtors used to introduce and illustrate its report. If you’re a “numbers cruncher” and “graph watcher”, this slideshow will provide you with the entire picture.
Things To Do In The San Gabriel Valley – “Events, entertainment, activities, and other things to do in the San Gabriel Valley”
Things To Do In The San Gabriel Valley:
And The Holiday Season Begins!
The Holiday season officially begins with the Thanksgiving Holiday approaching later this week. Whether it’s taking in a Thanksgiving weekend production of “The Nutcracker” at the Arcadia Performing Arts Center, or The Holiday Home Tour in Pasadena, there’s something going on for everyone.
To make things really convenient, the folks over at “Eye Spy L.A. have put togetherr a page that is solely focused on what’s happening with events, entertainment, and activities in the San Gabriel Valley from now through the end of the year and some even into next year as well. Whether you want to see a Christmas Panto at the Pasadena Playhouse or take in a “Musical Sleigh Ride” with the California Philharmonic at the beautiful Pasadena Civic Auditorium, there’s tons to do for everyone!
Here’s Here’s the link to the page at Eye Spy LA :
Events, Activities, Entertainment & Other Things to Do In The San Gabriel Valley Area | EYE Spy L.A.
Whatever activities you choose to pursue over the coming Holidays, be safe. Have fun, and have a Great Thanksgiving Holiday!
San Gabriel Valley Drought News:
Smart Cities Are Planning Ahead
Arcadia Is Leading The Way In What May Be A New Trend
In light of recent news concerning the severity of our ongoing California drought, and responding to urging by the Governor, cities across the southland are making plans and taking steps to conserve water usage and to handle other water supply problems, like implementing plans on how to provide adequate supplies needed by residents if conditions grow even worse. We are now moving into our 4th summer of drought in California, and things are truly getting dicey.
Here in the San Gabriel valley we are no exception. The City of Arcadia just approved the expenditure of $2 million to purchase imported water now to offset what they expect to be the amount over their allottment that they will need to pump to supply their resident’s usage. Buying and importing the water now means it can be purchased for less money than it would cost down the line… when the overpumping is needed. By making the purchase now the city is saving about $300,000.
Here’s an article from Courtney Thompkins of the Pasadena Star-News that explains it all:
Pasadena Star-News 04/08/15, 6:19 AM PDT
“Overpumping is allowed, but in order to do so, an agency must purchase replacement water to replenish the groundwater basin. Arcadia officials anticipate the city will need to pump nearly twice as much water as it has been allocated. However, instead of paying for replacement water at $100 more per acre-foot, the city chose to pre-purchase the imported water, saving the city $300,000.” …
Drought News Inspiring Action To Insure Water Supply
Since Governor Brown made his announcement the other day concerning the seriouslness of the California drought news, local municipalities are beginning to take action. Some cities, like Arcadia, are taking what might be called “unusual” steps in their planning. It’s times like this, however, that innovations begin to take shape, and creative thinking can really pay off. The San Gabriel Valley area has always been a coastal desert, and we’ve always weathered the storms that this type of situation can bring. We are going through a trying situation right now, but with good creative thinking, planning, and working together… this too shall pass.
San Gabriel Valley Drought News.
San Gabriel Valley Home Values:
Zillow vs The True Value Of Your Home
In Many Cases, Zillow’s “Zestimates” Do More Harm Than Good
Here’s an interesting question: who would you trust more to estimate the value of your home in our San Gabriel Valley real estate market? Would you choose a non-biased, impartial, completely scientific computer program in possession of all the data necessary? Or would you choose a human, fallible, Realtor who possibly needs your listing so badly they might just sell you a pie in the sky evaluation to get your name on a contract, or conversely, maybe doesn’t like working in your neighborhood and will provide a low-ball value just to move the property quickly and get a fast commission check?
Well, it seems, on the face of it, that the first option… the computer program… might be the wise choice. Heck! We’re living in the computer age, right? Estimating the value of your home based on the data available about the market in the area seems like the perfect thing for our techy age. However, you might want to re-think that.
Zillow is the most popular real estate information site in the U.S. for the public. As part of its service, Zillow provides “Zestimates” of every home in the database based on good, and usually current, information. Anyone, buyers or sellers, can access the Zillow home prices on the value of any home. Sellers can look up their own and Buyers can look up a home they’re thinking of buying. The problem is that many, many times, these “Zestimates” can be grossly incorrect. The CEO of Zillow says that their “Zestimates” have “a median error rate of 8%”. However, many areas are showing errors of up to almost 30%. That can be HUGE!
When the public is led to trust information like this it can throw a monkey wrench into real estate transactions and relationships. Buyers can insist a property is listed too high when it’s exactly on the market. Sellers can tell a Realtor they KNOW their home is worth more than tthe Realtor’s analysis shows, because Zillow told them so. This type of problem can lead to problems all over the place, unless the public is made more fully aware of the problem.
Here’s a recent article from the real estate section of the Los Angeles Times. It’s written by Kenneth R. Harney and provides a lot of specifics anyone interested in San Gabriel Valley real estate should understand:
L.A. Times Feb. 8, 2015 5 AM
“In Carlsbad, Calif., Jeff Dowler, an agent with Solutions Real Estate, did a similar analysis on sales in two ZIP Codes. He found that Zestimates came in below the selling price 70% of the time, with disparities ranging as high as $70,000. In 25% of the sales, Zestimates were higher than the contract price. In 95% of the cases, he said, “Zestimates were wrong. That does not inspire a lot of confidence, at least not for me.” In a second ZIP Code, Dowler found that 100% of Zestimates were inaccurate and that disparities were as large as $190,000.” …
Zillow Zestimates Or Experienced Experts?
So who do you trust with evaluating a home? The answer here is obvious. We may be living in an incredible age of technology and computer advancements, but you still need a good old-fashioned human expert who knows what they’re talking about to come up with a good, reliable valuation on a home. Whether you’re a Buyer who wants to make sure you’re not paying too much, or a Seller who wants to get every possible dollar out of selling your home, experienced and reliable Realtors and Appraisers are by far your best bet. Zillow may be a good tool to use to find a “starting point” for the discussion, but it is definitely not to be used for a reliable conclusion.
San Gabriel Valley Home Sales:
Market Predictions For 2015
Zillow’s Chief Economist Sees A Calmer, More Solid Market In The Coming Year
As we come to the end of 2014 people are wondering just what to expect from the coming year. Will 2015 see a re-birth of the crazy and volitile market action of 2013? Or will we see a continued calming of the waters? 2014 has seen a slowing of the insane action of 2013, and that type of “market solidifying action” is generally what we’re expecting in 2015.
For instance, the figures for Median Prices in California show an incredible 27.5% increase in 2013. This year that slowed to a more reasonable, but still very large 11.8%. The California Association of Realtors is predicting that 2015 will see a still positive, but much more normal rate of increase at 5.2%.
L.A. Times Dec. 2, 2014 6 AM
“In his predictions for 2015, Zillow chief economist Stan Humphries said he expects home values to rise 2.5% next year — positive territory but well below the 6% clip seen over the last 12 months. That slower pace, coupled with home builders shifting to construct more houses at lower price points than they have been, should help pull more first-time buyers into the market.” …
A More Reliable And Stable San Gabriel Valley Home Sales Market Seen For 2015
Yes, the real estate market is slowing down. And, yes, this is actually good news. As counter-intuitive as that might seem, rapidly moving and volitile markets provide opportunities for speculators, but actual buyers and sellers are better served by reliable, solid markets built on solid foundations. That type of “foundation building” is what we’ve been seeing the market do recently, and the more “normal” type of market action is what we can now expect for the coming year. The reverberations of the giant crash of a few years ago seem to be shaking themselves out, leaving calmer waters to navigate in the immediate future. This is good news for both buyers and sellers.
From Brion Costa, as well as the rest of us here, we wish you and yours a joyous Holiday Season and a Happy New Year!