North Los Angeles County Real Estate News

DAILY NEWS ARTICLE ON AV RETAIL GROWTH

2008-08-28T08:03:00.000-07:00

On Thursday August 28th, the Daily News featured an article on retail growth in the Antelope Valley. Projects approved in boom years are now under construction. For example, in 2005-2006, 500,000 square feet was approved. By the end of the next year, 1.4 million square feet was approved. The article is linked below:

http://www.dailynews.com/antelopevalley/ci_10320591?source=email

North Los Angeles County Real Estate News: APPRAISAL INSTITUTE ANNUAL CONFERENCE

2008-08-01T15:19:00.000-07:00

North Los Angeles County Real Estate News: APPRAISAL INSTITUTE ANNUAL CONFERENCE

APPRAISAL INSTITUTE ANNUAL CONFERENCE

2008-08-01T15:13:00.001-07:00

I attended the Appraisal Institute's annual summer conference, which included presentations from Fannie Mae and Jack Kyser of the Los Angeles Economic Development Corporation. The biggest piece of information that resonates with me today is that Commercial Mortgage Backed Securities (CMBS) transactions are off 92% from last year. That is a near complete collapse of the secondary mortgage market.

While there were plenty of declarations yesterday that the worst is about over, or that the new home market was poised to recover because only 1,000,000 homes will be built this year, UNTIL LIQUIDITY RETURNS TO THE MARKET, THERE CAN BE NO RECOVERY.

SCV HOME SALES RISE IN JUNE

2008-08-01T15:06:00.000-07:00

The Southland Association of Realtors reported that June transactions were up 11.2% compared to June 2007, also an increase of 4.1% from May 2008.

Median detached single family home prices dropped 25.6% from a year earlier and stands at $450,000, down from the $643,000 record high recorded in April 2006. The decline is exactly 30% from the peak over the 27 month period. The median price for condos was down 23% from a year ago to $285,000, and down from the January 2006 record of $397,000, down 28% from the peak. This indicates that the slide has been the most dramatic in the past 12 months.

Listings are down 16.4% from June 2007 and the current inventory represents only a 6.4 month supply at the current pace and slightly over the 5 to 6 month supply the Association deems to be "balanced" (though I don't know many sellers that would like to wait 5 to 6 months to sell their home).

The low inventory is optimism that once liquidity returns to the market, prices will stop declining.

The State of Commercial Real Estate

2008-07-30T08:51:00.000-07:00

I am asked every day if commercial real estate is feeling the affects of the housing crisis and the economy. It's usually the last to be affected and the last to come out of a slump. From Marketwatch.com today and the world's leading commercial real estate company (red and italics added):

NEW YORK (MarketWatch) -- Shares of CB Richard Ellis Group Inc. (CBG:
cb richard ellis group inc cl a
News, chart, profile, more
Last: 14.90-3.75-20.13%11:49am 07/30/2008Delayed quote data
Add to portfolio Analyst Create alert
Insider Discuss Financials
Sponsored by:
CBG 14.90, -3.75, -20.1%) , the world's largest commercial real estate services firm in terms of revenue, fell 22% on Wednesday after the company reported earnings and revenue came in short of analyst estimates. The company late Tuesday said that its profit fell 88% to $16.6 million, or 8 cents a share, down from $141.1 million, or 59 cents a share, a year earlier. Analysts' mean estimates were for per-share earnings of 44 cents on revenue of $1.42 billion, according to a poll by Thomson Reuters. "Based upon our initial review of the numbers we offer three key takeaways: sales weakness has spread globally now as opposed to mostly in the US in the first quarter of 2008, leasing activities are now also weakening after a strong first quarter, and lastly investment management incentive fees now look to be essentially non- existent in 2008," Citigroup analysts said in a Wednesday research report..

2,420 Homes: Homebuilder's Optimistic

2008-06-20T10:25:00.000-07:00

The Signal reported today that nearly 2,500 homes are planned for Canyon Country. The following was reported:

Projects already approved include:
• Spring Canyon - 499 single lots on 551 acres, with 385 acres of open space which includes two parks and three open space lots. Plans also include land set aside for a Sheriff's station and a fire station.

• Tick Canyon - which the developer referred to as Park Place, includes 492 single family lots on 500.6 acres, with 271 acres of open space and one large 16-acre multi-purpose.

• Sierra Way - 75 single family lots on 246 acres with 172 acres of open space.

• Meadstone - 63 single family lots on 80 acres with 56 acres of open space.

• Shapell Plum Canyon - originally approved for 1,300 single family lots including 1,200 condos, now calls for 1,298 single family lots and 1,202 condos on 603 acres of land, with allotment made for a school site and a fire station.

I am back

2008-06-13T06:10:00.000-07:00

Since my last post in late January, the real estate market has continued to deteriorate and transactions and credit for commercial property are less frequent. Other opportunities however have made my appraisal business busier than it has ever been, and I have been busier than ever. I will stretch a bit further and get back to blogging. Please let me know if you subscribe to this blog and tell me what you would like to see!

Finally, financial products are available for investors to bet on the direction in housing prices and for homeowners to hedge their equity in their homes. See the link below:

http://seekingalpha.com/article/81244-macroshares-to-launch-levered-up-down-housing-price-etfs?source=d_email

Too bad this wasn't available in early 2006 for home owners.

The last post I made pertained to a futures trade I made on the Los Angeles Case Schiller index and I promised to provide a result.

The trade was a bet that the market would drop; the only question was would it drop to the future value, more than the future value, or less than the future value. If the trade dropped to the future value, there would be no profit or loss; a value lower than the index would show a profit, and a value higher than the index would show a loss.

The index was slightly above the future value resulting in a small loss. The direction was right, but due to the illiquidity of trading futures, I could not get the future that I wanted. The new product mentioned above will have a much more liquid trading market and will be a better trade to make.

Until next time.......

MY HOUSING FUTURES TRADE

2008-01-29T14:52:00.000-08:00

Last year, it became possible to trade housing futures in various markets around the country, including Los Angeles.

Today, I placed an order to short the Los Angeles housing market using an index known as the Case-Shiller housing index. The trade expires on the last Tuesday in February, or February 26th. I will keep readers posted on the results of the trade.

The Case Shiller index was announced for January this morning with the Los Angeles area reporting an index of 240.43, down 3.64% for the month. My order is to sell at the bid, which is 241.60, which is already 1.17 in the money. A 1% decline will bring the index to 238.03, and will mean that I will have to buy the contract back at 238.03 for a profit of 3.57. One contract is worth $250, so each contract I sold will profit $893 ($250 x 3.57). Another 3% decline will bring the index to 233.22 and the profit will be 8.38 x $250 or $2,095 for every contract.

As a homeowner, assuming an $800,000 house and a decline of 1% per month, the loss in wealth is $8,000 per month. Trading 10 futures contracts would offset this decline in wealth.

Thoughts?

LARGEST DROP IN 25 YEARS FOR HOME SALES

2008-01-24T08:59:00.001-08:00

Existing home sales had a dismal 2007:

http://biz.yahoo.com/ap/080124/economy.html

Fannie Mae and Freddie Mac May Risit Limits

2008-01-24T07:51:00.000-08:00

Breaking News: This morning an economic stimulus deal throughout Congress looks imminent. In the package, it appears that Fannie Mae and Freddie Mac may raise loan limits to as high as $700,000 in some areas from the current $417,000. This will be a tremendous stimulus to residential lending and could be the single biggest solution to the current problem.

Our Hedge Fund: Up 21.5% Since Late December!!

2008-01-23T14:18:00.000-08:00

BENCHMARK CHANGE BETWEEN OPEN 12/24/2007 AND 1/22/2008
DOW -10.58%
S&P 500 -11.08%
NASDAQ -14.16%
BERKSHIRE HATHAWAY A -1.26%
3RD FRIDAY CAPITAL MGMT 21.48%

If you are an Accredited Investor, please contact me to participate in the hedge fund, which concentrates in real estate related securities as an alternative to direct investments in real estate debt or equity.

Guest Bloggers Wanted!

2008-01-15T15:03:00.001-08:00

After a 3 month respite, I am back to blogging about north Los Angeles County real estate. If you read this blog, please let me know who you are what you would like to see covered. If you would like to be a guest blogger, please let me know!

Scott Voltz
Voltz Commercial Realty Advisors
www.voltzrealestate.com

First 4 Villages of Newhall Ranch Approved

2008-01-15T14:58:00.000-08:00

The first four villages of Newhall Ranch received tentative map approval on Wednesday from the Los Angeles Regional Planning Commission. The Landmark Village tract will have 1,444 homes, apartments, and condominiums. Ground breaking is expected to be in 2009. 6,000 acres of open space along with schools, fire stations, and trails will be included. Source: Daily News.

HOME SALES PLUNGE IN SEPTEMBER

2007-10-17T15:05:00.001-07:00

Home sales plunged nearly 50% from September 2006 to September 2007, and 30% from August to September 2007. The brakes have been put on the market, as we have been noting in the subdivision land market. This was the lowest level of sales in more than 20 years according to Dataquick, a real estate tracking service and the lowest since Dataquick began tracking in 1988.

The median price dropped 7.6% from August to September 2007 and more than 4% from September 2006. On the bright side, Los Angeles County showed a median price increase of 1.2%, while Orange County was down 9.5%, Riverside County was down 10.8%, and San Bernardino was down 11%, San Diego was down 3.1%, and Ventura County was down 7.9%.

Santa Clarita Affordable Housing Needs

2007-10-17T14:57:00.000-07:00

The Santa Clarita City Council is addressing its affordable housing needs. The city has concluded that there are 598 units of affordable family housing, 944 units of senior rental units and 2,040 mobile home spaces in 16 parks throughout the city of Santa Clarita. Affordable housing is housing with rental rates at 80% of the median income. Seniors are reported to be 9.7% of Santa Clarita's population with 38% of the affordable units for seniors. Seniors are particularly concerned about the lack of Section 8 housing available and rental increases, given the lack of supply of affordable rental units.

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2007-10-12T11:11:00.000-07:00

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3rd Quarter Foreclosure Statistics

2007-10-12T11:03:00.001-07:00

Palmdale and Lancaster lead LA County with 378 trustee sales in Palmdale and 349 trustee sales in Lancaster (data courtesy of www.propertyshark.com). Six of the top 10 zip codes in LA County were in the Antelope Valley.

Measuring the Housing Market

2007-08-17T10:04:00.000-07:00

The proliferation of Exchange Traded Funds (ETF's) over the past 3 years has resulted in ways to measure the health of the industry that the ETF represents.

A new ETF will become available in September is a creation of RadarLogic and will track owner-occupied housing in 25 MSA's nationwide. There are indexes that do this now, however what makes the index (RPX) unique is that it will be updated daily and will be based on the price per square foot.

The data will come from public sources. A beta version is available at www.radarlogic.com. Morgan Stanley, Merrill Lynch, and Lehman Brothers will begin offering this to their instutional clients.

Why trade this ETF? If a homeowner wants to hedge against falling real estate prices, they could short the index (or buy puts if they are option traders). If an investor believes the market has bottomed and wants to get in, then they can buy the index rather than buy a rental house. The liquidity of buying the index, which will probably be marginable, is an excellent proxy for being in the real estate rental business.

Metrolink Station Inside a Mountain?

2007-08-16T16:40:00.000-07:00

Palmer Investments in planning a Metrolink Station inside of the mountain in the Newhall Pass between Newhall and Sylmar. The Metrolink trains currently run through the San Gabriel mountain range via a tunnel 100 yards below the surface. The station is planned for middle of the tunnel and will include elevators from the surface to the platform and a parking garage and a bus transit center. City of Los Angeles planners say they have not seen anything like it.

The 5,800 unit project, Las Lomas, is planned on the north side of Interstate 5 and west of the Antelope Valley Freeway.

Foreclosures by Zip Code and City

2007-08-16T16:27:00.000-07:00

From First American CoreLogic for the 2nd quarter 2007

Zip Code Location Q2 2006 Q2 2007 % Change
91384 Castaic 3 17 467%
93591 Palmdale 0 10 NA
91390 Santa Clarita 1 7 600%
91381 Stevenson Ranch 1 13 1200%
93535 Lancaster 11 107 873%
93534 Lancaster 5 51 920%
93552 Palmdale 0 52 NA
93550 Palmdale 5 103 1960%
91350 Saugus 1 16 1500%
93510 Acton 3 1 -67%
91354 Valencia 4 11 175%
91387 Canyon Country 5 27 440%
91355 Valencia 2 13 550%
91321 Newhall 1 17 1600%
93551 Palmdale 3 73 2333%
91351 Canyon Cntry 2 29 1350%

If you believed what you heard about the percentage increases, you would think the sky is falling. The absolute numbers are up considerably and it is affecting the market overall, however, it is far from a disaster in most areas, and approaching the rate in normalized periods.

LATEST FORECLOSURE STATISTICS

2007-07-25T10:13:00.000-07:00

Courtesy of Propertyshark.com, you can find the latest foreclosure information. This site is a great site for property and market information:

http://www.propertyshark.com/mason/Foreclosures/la_tax_property_sale.html

North L.A. cities get richer as development and property values increase

2007-07-13T13:49:00.000-07:00

The Daily News reported on the increase in development in Santa Clarita, Lancaster, and Palmdale filling the tax coffers.

The Assessor's office reported that these 3 cities saw the biggest increases in total property value. Lancaster was first with a 21% increase, Palmdale 3rd with a 16% increase, and Santa Clarita was 4th with a 14% increase. Santa Clarita's total assessed value was $21.5 billion and is reported to be the 4th largest in assessed valuation, AHEAD OF Glendale, Santa Monica, Pasadena, and Beverly Hills.

Some of the growth is due to annexation. More than 3,000 properties were annexed in Santa Clarita last year, and the city is moving forward for the first time in annexing parts of Castaic. More than $1 billion in assessed value was attained through annexation.

Palmdale's growth is largely due to commercial development around the Antelope Valley Mall.

Lancaster Fastest Growing City in California

2007-07-02T08:34:00.001-07:00

Growing 5% over the previous year to 143,818, Lancaster is the fastest growing city in California and 10th fastest growing in the nation.
Palmdale ranked 25th for the nation.

May SCV Home Sales-Prices UP/Sales DOWN

2007-07-02T08:17:00.000-07:00

Sales down 21% Year over Year (May)
Median price up 3.4% over April to $615,000
Inventory: 2,240 units end of May
179 escrows closed in May, down 23.5% from May 2006
Nationally: home sales up 12.5%, but prices down .9% year over year
State median sale price $591,180, up 4.8% from May 2006

492 Homes Coming to Canyon Country

2007-06-12T15:42:00.000-07:00

The Regional Planning Commission agreed to allow construction of 492 homes in Canyon Country. The 500 acre development will be known as Park Place and will be built at the end of Shadow Pines Boulevard.

More than half of the acreage will remain open space including a 16 acre public park. The developer is Synergy Land out of Newport Beach. Environmentalists objected to the project but were overruled by the Regional Planning Commission.

No time line is set but final maps are required within two years.

Fly Palmdale to San Francisco Direct

2007-06-12T15:37:00.000-07:00

Last week, United Airlines started twice daily flights between Los Angeles/Palmdale and San Francisco. The earliest flight will be at 10:00 am.

A $4.6 million incentive package from Los Angeles World Airports, the city of Palmdale, and others will help publicize the service, especially in the Santa Clarita Valley, which is seen as a viable market for those seeking to avoid Burbank Airport and LAX. The distance to either airport is about the same from Santa Clarita, however traffic, parking, and lines are issues at Burbank Airport.

From Palmdale, passengers can travel to San Francisco and transfer to east coast and international flights that might be harder to make from LAX or Burbank connections.

Palmdale will offer free parking.

Santa Clarita Affordable Housing Needs

2007-06-12T15:31:00.001-07:00

The Signal reports that according to a report to be delivered to the Santa Clarita City Council, over the next 10 years a total of 84 affordable housing units will be needed with 270 units needed over the next 25 years in the Newhall redevelopment area. The Santa Clarita Redevelopment Agency has $2.2 million available for low and moderate income housing. Another $3.2 million is estimated to be generated my mid-2012.

Bridgeport Marketplace

2007-06-12T15:05:00.000-07:00

This is one of the more exciting retail centers to come to Santa Clarita in many years. It is located in the Northbridge community and is scheduled to open in April 2008. It will be located on the north side of Newhall Ranch Road between McBean Parkway and Grandview Drive.

The center's architecture will be reminiscent of the Bristol Farms anchored center in Thousand Oaks. Bristol Farms will be one of the anchors, along with Kabuki Japanese Restaurant, Walgreens, and Daphne's Greek Cafe. The center will be 100,000 square feet and will include office space.

The center will include 5 acres of park area and a church.

Eminent Domain for downtown Newhall?

2007-06-12T14:47:00.000-07:00

While awaiting the results of "friendly" appraisals for several downtown Newhall properties, the city of Santa Clarita has moved forward with developing an Eminent Domain ordinance, as mandated by the State of California, reported The Signal today.

The appraised values are scheduled to be announced in the coming weeks. The three appraisal firms are well known in the appraisal community for being appraisal firms long in litigation and eminent domain experience. Two of the three firms are located outside of the Santa Clarita Valley.

Eminent Domain, also known as condemnation, allows a public entity to "take" any property it wants for "public benefit". However, the "taking" agency is required to pay "Just Compensation" which is ultimately what a court decides, not an appraiser, property owner, or government agency.

The taking is an "involuntary taking" of property.

The rules for market value are different for eminent domain than they are for the typical appraisal, in that the definition includes the "highest probable price" paid for a property in condemnation appraisal; in appraisals for mortgage financing, the definition is the "most probable price". The difference is subtle but it is important. The property owners are having their properties involuntarily taken from them.

Santa Clarita-Top 25 Retail Markets in California

2007-06-03T17:16:00.000-07:00

Santa Clarita has passed Thousand Oaks, Pasadena, and even Santa Monica in retail sales. Santa Clarita's retail sales exceed $2 billion in 2006. In spite of the large retail sales base, residents still travel to the San Fernando Valley for shops and restaurants in the Santa Clarita Valley, though that gap is narrowing every year. Santa Clarita was named by the Economic Development Corporation as Los Angeles County's most business-friendly city.

Help For Property Owners Being Condemned May Be On The Way

2007-05-22T10:33:00.000-07:00

In the wake of the June 2005 U.S. Supreme Court decision, Kelo vs. New London, which affirmed cities' rights to seize homes and business and replace them with private properties, the California legislature is looking at a new state bill and amendment that would significantly benefit homeowners.

Proposed Assembly Constitution Amendment 8 would compel cities to pay for 3 years worth of rent or mortgage payments for a business if it were relocated as a result of eminent domain.

If displaced businesses were bought out and not relocated, a city would be required to pay 125% of the value of the business if it was economically viable in addition to the value of the property.

The bill was introduced by Assemblyman Hector De La Torre and sought by a group called Californians for Eminent Domain Reform. Another proposed initiative by the Howard Jarvis Taxpayers Association seeks to ban the use of eminent domain for private development.

In the past, governments condemned land for parks, schools, or roads. However, more aggressive cities have used the condemnation process for the development of private businesses like power centers and mega-theater complexes. The governments argued that the resulting increase in tax revenues to the city was a "public benefit", while opponents interpret the "public use" requirement more narrowly.

The issue is particularly important for Northern Los Angeles County (NLAC) where the city of Santa Clarita is seeking to acquire in "friendly transactions" properties in downtown Newhall. The cities of Palmdale and Lancaster are also actively seeking to redevelop parcels.

Welcome

2007-05-21T16:08:00.000-07:00

to THE blog for Northern Los Angeles County commercial real estate.

My name is Scott Voltz and I am the most experienced commercial real estate appraiser in Northern Los Angeles County (NLAC). I have specialized in appraising all types of real estate in northern Los Angeles County since 1989, when I started Southern California Real Estate Counselors, Inc., currently doing business as Voltz Commercial Realty Advisors (www.voltzrealestate.com)

I have published a newsletter covering Northern Los Angeles County real estate matters off and on for nearly 10 years. After a several year hiatus, I have brought back the newsletter. The development of on-line newsletter services and the explosion of the internet has meant new avenues to communicate with clients and market participants and those wanting to learn more about NLAC.

I am an MAI appraiser (Member of the Appraisal Institute) and have been servicing banks, attorneys, developers, cities, and property owners in the Santa Clarita and Antelope Valleys since 1989. Our government clients have included the cities of Santa Clarita, Lancaster, California City, Moorpark, and Santa Paula. Banks include Antelope Valley Bank, the Bank of Santa Clarita, and Mojave Desert Bank, just to name a few local banks.

I intend to regularly publish market information on this blog. I will also invite guest bloggers to discuss matters concerning real estate in Northern LA County (NLAC). If you'd like to be a guest blogger, or if you'd like to sponsor this blog, just drop me a note.

Check back often and refer the blog to your real estate friends.

Scott Voltz, MAI, MBA