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94 California Handling REOs and Corporate Owned Assets for Over 25 Years Joyce Essex Harvey & Sean Freeman Coldwell Banker Residential Brokerage 310.720.9067 (c) 310.777.6375 (o) Joyce@EssexHarvey.com EssexHarvey.com Woman-Owned Business Serving Los Angeles County CalDRE#00935813/01366376 CALIFORNIA Flipper-Uppers Based on proprietary data and other publicly available real estate records, Lending- Home recently released "State of e Flipping Market" report—focusing on California's real estate landscape. It revealed an upward spike in the number of brand-new houses flipped in California during the past year, compared to all other states. In addition, California featured as the top state for loan originations in 2017. e report highlighted that house flipping is an integral part of California's residential industry. Several aging homes in need of repair undergo a significant upgrade through renova- tions. Quoting U.S. Census Bureau's Ameri- can Housing Survey, the report indicated that over half of all homes in the country are at least 39 years old. e data in "State of e Flipping Market" also reveals the number of flips in each county statewide—from 2014 through 2017. e report findings are based on the growth in the total number of fix-and-flip homes purchased, median revenue per flip and the percent of flips financed with a loan. According to the report, the rampant flipping activity in California is reflective of a strong seller's market wherein people looking to buy a starter home will be successful home- owners given their willingness to undertake renovations themselves. To flip a house in California takes 180 days—20 days faster compared to the nationwide average. Speaking of renovations among millennial homebuyers, a recent report titled "Pins & Properties: Chasing Your Dream Home" by Chase Home Lending and Pinterest revealed that 87 percent millennials are planning some kind of renovation and 68 percent intend to spend at least $20,000 on renovation projects. As most first time homebuyers do not have the income to afford their dream home right away, they purchase starter homes and make substantial upgrades eventually. Top 5 Flipping Hot Spots in California by County Los Angeles topped the list with 25.71 percent of total flip houses purchased between 2014 and 2017, recording a median revenue per flip at $140,000. is was followed by San Diego, Riverside, San Bernardino, and Sacramento at 9.55 percent, 8.88 percent, 7.28 percent, and 6.08 percent respectively—the percentage indicative of all flip houses pur- chased. Carrington Examines GDP Growth Some of 2018's housing market trends such as inventory shortage, rising interest rates, and home price appreciation are likely to continue into 2019 even as the economy continues to perform well. ese and other insights into the future of the housing market were given dur- ing a webinar by California-based Carrington Mortgage. Presented by Rick Sharga, EVP, Car- rington, the webinar touched upon the current macroeconomic trends before diving into the current housing market and its forecast for 2019. Speaking about the U.S. economy Sharga said that in 2018 the GDP had performed beyond expectations with the GDP numbers almost at 4 percent last quarter. is, accord- ing to Sharga, was a sign that the economy was being productive. Looking at 2019, he said that economists were predicting a more moderate pace of GDP next year. "Economists are predicting a mild recession in late 2019 with the GDP pace slowing further in 2020," Sharga said. With unemployment remaining at a 49- year low, job creation has continued to grow well as the economy witnessed a return to well-paying jobs. Sharga also pointed to strong and steady wage growth—another sign of the economy moving in the right direction. While inflation remained relatively low, the rise in wages was likely to trigger a rise in inflation, even though it remained within the Fed's estimated 2 percent range. Narrowing the focus to the housing market and some of the trends that impacted the mar- ket in 2018, Sharga said that extraordinarily low inventory remained a big problem through most of the year. While inventory levels did go up in certain areas in the latter part of the year, "they're barely reaching four months supply," said Sharga, referring to the housing supply needed to meet the growing demand of housing. Referring to the uneven distribution of supply in the market, Sharga said that while we're seeing a supply glut at the higher end of the market, the middle-range of homes were witnessing an inventory shortage. "e low-end of the market has no inventory at all," he said. Looking at the trends for 2019, Sharga said that while inventory would improve slightly it would still not meet demand. Home price appreciation, which has risen by 5.5 percent in the current year was likely to continue, but at a slower pace. Mortgage rates for 30-year loans, which approached 5 percent in 2018, were likely to hit the 5 percent mark by mid-2019 and rise further to 5.25 percent by year-end. Even though they seemed high at present, Sharga pointed out that historically speaking, mortgage rates remained at the low end. Touching upon home sales, which have disappointed in 2018, Sharga projected sales to rise slightly in 2019, with existing home sales recording between 5.4 million to 5.5 million units and new home sales being pegged at approximately 650,000 units. Manufactured housing was also likely to fill some of the entry-level demand for homes. With delinquencies projected to reach record lows, there was no foreclosure crisis or a housing bubble on the horizon. "Wage growth and relatively low interest rates have offset price increases so far," Sharga said. "Price cor- rection is possible in some overheated markets and affordability is better than it looks at first glance, though it is weakening." Why Have Luxury Home Prices Caught a Cold? e supply of homes priced $ 2 million or more fell 6 percent from a year earlier even as the home prices for luxury properties saw their lowest growth since the fourth quarter of 2016, according to a Redfin report on luxury home prices. e report, which tracks luxury home sales in more than 1,000 cities across the country, indicated that luxury home prices rose 3.2 per- cent year-over-year to approximately $1.7 mil-

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