Foreign Buyers on the Rise in California

Real estate sales to foreign buyers and new immigrants surged to new highs in the last year, according to a study released Tuesday by the National Assn. of Realtors, with the Southland being a prime destination.

Overseas buyers and newcomers to the U.S. accounted for $92 billion in home sales in the 12 months ending in March, NAR said. That’s up 35% from the prior 12-month period, and higher than the previous record of $82.5 billion set in 2012. These buyers made up roughly 7% of all U.S. home sales, by dollar value.

The increase was fueled by a 50% jump in activity from Chinese buyers, who bought $22 billion worth of U.S. real estate last year. Experts say many Chinese buyers see U.S. real estate as a better investment opportunity than is often available in China, and in some cases as a safe haven for cash. Many also buy homes here to put their children in U.S. schools.

And Chinese buyers, in particular, have an eye for Southern California. Los Angeles and Irvine were two of their top three destinations, according to the survey, with San Francisco ranking second. Chinese buyers have long been a factor in some parts of Southern California, particularly the San Gabriel Valley; as more come here, they’re spreading to new areas as well.

Los Angeles is the top choice for buyers of several other nationalities, too, according to data tracking searches of Realtor.com. Buyers from India, the United Kingdom, Australia, Ireland and Russia were also most likely to search here. For Mexican buyers, San Diego was the top choice.

The Realtors Assn. said it expects foreign interest in U.S. real estate will continue to grow as the economy grows ever more global.

“We live in an international marketplace, so while all real estate is local, that does not mean that all property buyers are,” said NAR president Steve Brown. “Foreign buyers are being enticed to U.S. real estate because of what they recognize as attractive prices, economic stability and an incredible opportunity for investment in their future.”

Source: LA Times Online

Beverly Hills Golden Triangle Retail Space JUST LEASED!

9631 Brighton Way Beverly Hills CA 90210

9631 Brighton Way offers an open and airy retail/office space in the heart of the Beverly Hills Golden Triangle. This 1,693 sq. ft. space features everything Beverly Hills has to offer plus high ceilings, lots of natural light, great street visibility, and a mezzanine perfect for offices. Just two blocks from Rodeo Drive, and next to recognizable names such as Villa Blanca, Madison, Harrari, Giuseppe Zanotti, Chanel, Armani, YSL, and Prada to name a few. The perfect location to build your brand and be seen!

If you’re looking for a commercial space for lease or sale, please contact me direct:

Julie Kryukova
202 N. Canon Dr.
Beverly Hills, CA 90210
310.402.8181
jkryukova@gmail.com

Technology for a Smarter Home: 5 ways to make your home smart for under $1,000 bucks!

Nowadays all you hear about is new technology, from electric cars that park themselves to commercial flights bound for space. Well in real estate, Smart Homes are the “new thing”! Smart-home systems start at around $2,000 and top out at more than $1 million, offering homeowners remote-controlled lighting, window shades, swimming pools, door locks, thermostats and security cameras – not to mention cutting-edge sound systems and home theaters. I’ve even seen a system that turns a regular TV room into a nightclub with the touch of a button on your iPad. Innovation is the key to growth and from my experience as a Realtor; it pays to trick your house or business out with the latest gadgets.Don’t just do it to impress friends, family, and customers, but think of potential buyers, as well! In working with clients of all budgets, all over Los Angeles, and in both commercial and residential real estate, I’ve come across some interesting technology and trends. Some of these trends and gadgets are unimaginably expensive, others I find useless, while some are pretty impressive and tangible for home and business owners. Below are some of the smart home trends I’ve seen, which are useful and affordable, and will increase the value and “It Factor” of your property almost instantly!

1. NEST: The smart version of your everyday thermostat, designed to learn the temperatures you prefer while switching to energy efficient settings while you’re away. The more I look at homes, in all price ranges, but mainly those that have been recently updated, the more I see this Nest feature that sellers and agents are always bragging about or pointing out. Essentially it gives new life and sleekness to the boxy, outdated, boring old thermostats you see and throws in a feature that allows you to control the temperature of your home while you’re away, learns what you like, and helps you save a few bucks on your energy bill. Nest runs about $250 and seems to be worth every penny from what I hear.

Nest

2. Cyber Rain Sprinkler System: This is a sprinkler controller with a brain. It uses the internet to check the weather and automatically adjusts run times. This system is ideal for the homeowner who wants to conserve water and be alerted to problems with their landscape. The Cyber Rain Pro checks your controller status every time it waters and emails if it detects a problem. If an optional flow meter is attached, the Cyber Rain Pro will also email you if you have a broken sprinkler head or a leak in your irrigation pipes. The system can also be remotely accessed by your landscape professional. Considering the costs of water and the serious drought problems in CA, this sounds like a smart investment. I’m surprised more people aren’t using technology like this to conserve water and save cash! It’ll run you about $700 bucks, but I’ve seen some of my clients’ water bills and trust me…it’s worth it!

Cyber Rain

3. Phillip Hue: Combines brilliant LED light with intuitive technology. Puts both in the palm of your hand. According to the company site: “Together, the bulbs, the bridge, and the app will change the way you use light. Forever. Experiment with shades of white, from invigorating blue to soothing yellow. Or play with all the colors in the hue spectrum. Hue can wake you up. Help protect your home. Relive your favorite memories, and even improve your mood.” This is a smart LED lighting product that you control from you iOS device. Basically this system takes your home’s or business’ mood lighting to the 21st century. So when you’re putting your home on the market or planning a big restaurant opening, consider “setting the mood” and see what transpires! Costs $200 and you can buy it at the Apple Store.

Phillip Hue

4. Yale Smart Locks: Sleek Motorized Z-Wave Touchscreen Deadbolt for Remote and Automated Access Control. Runs about $250 and combines a highly secure lockset with an illuminated 12-button touchscreen keypad, which allows users to lock and unlock their home via manual control or Z-Wave compatible home controllers. The lock stores up to 25 custom entry codes for easy manual locking and unlocking, plus an automatic deadbolt lock function. It’s designed for seamless integration with any Z-Wave product or central home controller to allow for monitoring of the lock’s status and remote lock/unlocking of your doors. An upcoming Yale lock will feature NFC (near-field communication) tech that will allow you to open it by waving your smart phone over it Jedi-style. With devices like this, you’ll never get locked out again!

Yale

5. The iSmartAlarm System: The system is modular, letting you buy the pieces you need in order to put together the perfect system for your home. You’ll need a CubeOne, which is the brain of the system, and then you can add sensors for doors and windows, cameras, motion detectors and remote control keyfobs. If any alarms come up, you’ll get an alert on your phone, and you can see what’s happening through the app in order to respond appropriately. You can also use iSmartAlarm to see if your family is home — even when you’re working late — and check that all of the doors and windows are closed and locked before heading to bed. Starts at $199, while safety and peace of mind are definitely priceless!

ISMARTALARM-CAM

These days, you can automate just about everything, depending on your budget and needs. The smart home & business trend is something new today, but soon it’ll become the norm and be expected, so get ahead of the game and turn your home or business into a smart one! We may not be living quite like the Jetsons yet, but we’re getting there! If you’re looking for tips or recommendations for home automation, please contact me.

As always, if you or someone you know is in need of real estate assistance, commercial or residential, I am happy to help! Please contact me direct or pass my information along!

Julie Kryukova
Tel: 310.402.8181
Email: jkryukova@gmail.com

Real Estate Investors Can Defer Taxes with a 1031 Exchange

Beverly Hills real estate

Paying taxes on capital gains for property transactions has always been a hindrance to those involved in real estate investment. Why should investors pay taxes on profit from real estate transactions if they’re putting the profit right back into some other real estate transaction?

The answer: They shouldn’t.

That’s exactly why the IRS created 1031 exchanges: to allow for tax deferment on profit that is reinvested immediately. Notice it’s a deferment, not a credit or a reduction. It does have to be paid eventually, just not at the time of sale and not until the money is taken out of the property, at which point it is taxable. Eager to learn more, I found some info on 1031 exchanges at 1031.org.

What Is a 1031 Exchange?

Simply put, a 1031 exchange is a method of deferring the tax on capital gains until some point in the future, according to 1031.org. They’re called Section 1031 exchanges because Section 1031 of the Internal Revenue Code states that “no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business, or for investment.”

Section 1031 was created to encourage reinvestment of sale proceeds of property into similar property. Obviously this stimulates business and growth. As long as the investor continues to put profit back into more property, taxes are not owed.

This all makes pretty good sense. Let’s say I invest in a house in Beverly Hills that costs me $100,000 (I WISH!). I put $50,000 into the house and put it on the market. It sells for $250,000. My $100,000 profit, or capital gain, is then put into another property that I buy to fix up and sell. This continues, and all of my capital gains are deferred with a 1031 exchange UNTIL I sell my last property and enjoy my profit. At that point, I pay all taxes owed.

Frequently Asked Questions About 1031 Exchanges

What is the benefit of a 1031 exchange versus just selling property?

A Section 1031 exchange is one of the few ways investors can defer taxes due on the sale of property (assuming it qualifies for a 1031 exchange). Deferring taxes allows investors access to the money that would otherwise be paid in taxes, allowing them to invest in another property.

What are the general guidelines to follow in order to defer all the taxable gain?

The IRS is very clear on this. The value, equity in and debt on the new property must be equal to or greater than the value of the property being sold for an exchange to be valid. This is even more important – ALL of the profit from the property sale MUST be used to buy the new property. If even a tiny percentage of the profit is used for something else, the 1031 exchange is not valid.

If there is already a contract to sell the property, is it too late to start a tax-deferred exchange?
No, as long as there has not been a transfer of title or a closing on the sale of the property, a tax-deferred exchange can still be arranged. Once the closing occurs, it is too late.

Can the replacement property eventually become the investor’s primary residence or vacation home?
Yes, but Section 1031 has holding requirements (minimum length of time the new property must be owned) that must be met prior to changing the primary use of the property. According to 1031.org, the IRS has no specific regulations on holding periods (though a minimum of a year is recommended), and “if the owner later on wants to take advantage of the home owner’s exemption (up to $250,000 or $500,000 for a couple), there is now a five year holding period requirement.”

Finally, remember that if you’re a real estate investor or considering becoming one, now is still a great time to do so. Mortgage rates are still very low and property values, though trending up, are also still very low in many parts of the country. As always, please let me know if you have any questions.Happy investing!

If you’re looking to buy, sell, or lease residential or commercial real estate in Los Angeles, please contact me direct at jkryukova@gmail.com or 310.402.8181.

Credit standards going easy on jumbo mortgages

home_money

Demand for non-government loans keeps growing!

Despite overall originations hitting the lowest level since 2010, the past year witnessed a significant increase in the volume of home equity loans and lines of credit, in addition to originating the best-performing mortgages on record, the first report from Black Knight Financial Services, previously known as Lender Processing Services, found. For jumbo mortgages, however, it’s a completely different story.

Two key points about the November numbers stand out according to Herb Blecher, senior vice president of Black Knight Financial Services’ data & analytics division.

“First is that heightened credit standards have resulted in this year being the best-performing vintage on record. Even adjusting for some of these changes, such as credit scores and loan-to-values, we are seeing total delinquencies for 2013 loans at extremely low levels across every product category,” Blecher said.

The second point Blecher emphasized was that overall volumes are down. “We are seeing an increased proportion of the market being supported by non-agency (vs. government) lending – with the share nearly doubling as compared to 2010,” Blecher added.

However, increasing home prices have helped offset some of the drop in originations with demand for home equity loans increasing.

“While first mortgage originations are almost half the levels as one year ago, total home equity lending, including loans and lines, has increased by 70%, and originations of second lien home equity loans have more than doubled,” Blecher said.

In addition, the market also observed a 75% year-over-year increase in the share of non-agency jumbo prime lending.

“Notably, nearly all of these jumbo loans have been originated with no mortgage insurance, which may indicate an increased appetite for risk, as well as an opportunity to expand credit criteria, for originations within the private market,” Blecher explained.

The November data revealed that the population of “refi” mortgages has decreased by about 4 million loans since the end of 2012.

In comparison, just 5.9 million loans meet broad-based refinance criteria. But loosening the credit standards to just a 700 FICO increases the refinance population by almost 17%, or an additional 1 million loans.

If you’re looking to lease, purchase, or sell residential or commercial property, please contact me direct at (310)402-8181 begin_of_the_skype_highlighting (310)402-8181 FREE  end_of_the_skype_highlighting or jkryukova@gmail.com

Source: Housingwire

Americans build larger, more costly homes

construction_home

Newly built single-family homes in the United States are getting bigger, costlier to build and more expensive, according to the National Association of Homebuilders. This news comes on the heels of news that home prices climbed 11.8% between November 2012 and November 2013.

In fact the only thing shrinking for new construction is the size of the lot they’re built upon, according to NAHB’s most recent construction cost survey of 3,019 builders. The survey was conducted in August and September of 2013.

The survey shows that this trend is happening across all levels of homebuilding. That is to say, the increase in the average price, cost and size is not a result of high-end homes gains pulling the average up or lower-cost and mid-level homes gains pushing upward.

“It’s an across the board gain,” says Heather Taylor at the economics and housing policy department at NAHB. “In fact we factor out the high end market since it can skew the results.”

The cost to build a single-family home was $246,453 in 2013, which is the highest cost since 1998. Newly constructed home prices jumped 25% to $399,532. That is below the peak of $454,906 in 2007.

While the cost of building a new single-family home in 2013 represented a 34% increase from the cost, profits jumped to 9.3% from their 2011 all-time low of 6.8%.

The average size of the home in the 2013 construction cost survey was 2,607 square feet, which is about 300 square feet more than the average size of the homes reported in the 2011 construction cost survey, but still about 100 square feet less than the peak reported in the 2009 survey.

The average home in the NAHB survey was built on a one-third acre lot, as opposed to a half-acre lot average found in the 2011 NAHB survey.

By type and percentage of construction costs, interior finishes accounted for 29.3% of construction cost, with the balance spread among framing (19.1%), exterior finishes (14.4%) and the combination of plumbing, electrical and heating, ventilation and air conditioning (13.4%).

The average share of the home’s sales price which goes to construction cost jumped from 59% in both 2009 and 2011 to 61.7% in 2013. Finished lot costs, accounting for the second largest share of the sales price, dropped from 22% in 2011 to 19% in 2013.

Although the cost of construction per square foot remained relatively stable in 2009 and 2011 ($82 per square foot, and $80 per square foot, respectively), it jumped to $95 per square foot in 2013.

These results, NAHB reiterate, are national averages; the survey sample is not large enough for a geographic breakdown. Building practices, the cost of labor, the cost of land, and to some extent the cost of the materials can vary from place to place and depend on the nature of the particular home being built.

If you’re looking for real estate assistance, both commercial and residential, please contact me directly at (310)402-8181 begin_of_the_skype_highlighting (310)402-8181 FREE  end_of_the_skype_highlighting or jkryukova@gmail.com

www.juliekproperties.com
www.laluxegroup.com

Source: housingwire

New rules for jumbo loans, qualified residential mortgages could make homebuying more costly in 2014

On Jan. 1, 2014, a new provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act goes into effect. The “qualified residential mortgage,” or QRM, may have far-reaching effects that will lessen the number of people who ultimately can obtain home loans.

Most agents and brokers have no idea what QRM is or how it will impact their businesses. Briefly, QRM was designed to set the bar for residential mortgages and to minimize the risk that borrowers may default. It requires that debt ratios be limited to 43 percent and loan fees limited to 3 percent, and interest-only loans and negative amortization are not allowed in most cases.

The Dodd-Frank bill also requires the lender to retain 5 percent of any mortgages they make. In other words, if they make a $100,000 loan they must retain $5,000 to secure the loan. QRM loans are exempt from the risk retention rules. This means that the lender can sell the loan on the secondary market without having to retain the 5 percent. The effect of these provisions is already being felt in the lending industry. Citibank has restricted its lending to those areas where it has a banking presence. Compliance departments have tripled in size at many large lenders. Community banks and credit unions are being choked by the regulations and often lack the resources to meet the new compliance requirements.

“Community banks and credit unions have historically had a much lower default rate as compared with other lenders. The reason is that they know their customers,” said Mark Bigelow, national sales manager at Towne Mortgage Co. and AmeriCU Mortgage. “Community bank loans have often been based on a handshake. In terms of credit union loans, people feel they are hurting themselves and other members if they default.”

Bigelow went on to explain what makes the Jan. 1, 2014, provisions so difficult for lenders: “In the past, loans have been turned down primarily due to credit issues. For the first time in history, lending decisions may be made based upon compliance issues rather than just credit issues.” Here’s why: Imagine that you made a mistake on a purchase agreement. The buyer and seller want to change the agreement to correct the mistake, except the law prohibits you from doing so.

If a lender makes a mistake with any part of the compliance, here’s what happens:

1. The lender now has to pay all of the borrower’s closing costs.

2. Even if the mortgage agent made the mistake, the mortgage agent must still be paid.

3. The lender cannot deduct any costs or losses resulting from the mistake.

4. The lender still has to close the loan.

 

These provisions will be particularly difficult for online mortgage sites such as LendingTree, Quicken and Zillow. In addition to the issues cited above, jumbo loans currently fall outside the QRM provisions. This creates tremendous uncertainty as to what will be required of lenders who want to sell jumbo loans on the secondary market. The result will most likely be that be even fewer jumbo loans will be available.

What this means for agents, brokers and their clients:

1. There will be fewer loan choices as community banks and credit unions are squeezed out of the market making it even harder for many borrowers to qualify.

2. The loan process will also probably take longer due to the increased compliance.

3. It will probably be much more difficult and costly to obtain a loan in the future.

 

Lenders generally want to issue loans that meet QRM criteria. It gives them an exception to a rule they find troubling. It allows them to sell a higher percentage of their mortgages into the secondary market, thereby reducing their long-term risks. As a result, the majority of lenders will impose these guidelines upon their customers. These rules will essentially set the bar for mortgage lending standards in the U.S. Borrowers who fail to meet these criteria will have a harder time finding a loan compared to borrowers who do meet the criteria. They might end up paying a higher interest rate as well. Lenders claim that risk retention increases their operating costs, so they will likely charge more for loans that are subject to risk retention. Financial analysts from J.P. Morgan Securities have estimated that borrowers might pay up to three percentage points more for loans that are subject to risk retention (i.e., loans that don’t meet the definition of a qualified residential mortgage). So here’s the bottom line: Encourage anyone who is on the fence about selling or buying to do so before the end of the year. Otherwise, they may be caught up in maelstrom of new regulations that can sink their sale and that might also sink the real estate recovery.

Source: Inman News

 

Prime Beverly Hills Penthouse – Private sale $1,349,000

Palm Penthouse

Elegant top floor 3 bedroom view penthouse in prime Beverly Hills! Impressive dimensions at 2,621 sq. ft, extra wide hallways, and tons of skylights make this space feel like a single family home.  Large eat in kitchen with breakfast nook, updated stainless appliances, and a large window allow for plenty of cooking and storage space.  How often do you see a top floor unit that shares no walls at all with its’ neighbors?  Asking price $1,349,000

  • 3 bedrooms
  • 2.5 bathrooms
  • 2,621 sq. ft
  • Skylights throughout
  • Wide hallways, high ceilings
  • Impressive master suite with fireplace, large windows, private patio, tons of closet space, vanity area, double sinks, separate tub and shower
  • Large updated kitchen stainless appliances and eat in nook
  • Oversize open concept living room with short windows
  • Washer and Dryer inside the unit
  • 3 assigned parking spaces side by side
  • Enormous private storage space
  • Secure entry, private elevator
  • Honey hardwood floors, brand new lush carpet in the bedrooms

Please contact me for details and private showings.  Property is located North of Burton Way, West of Doheny Drive in Prime Beverly Hills, CA 90210.

 

Palm1 Palm2 Palm3 Palm Penthouse Beverly Hills for sale

JUST LISTED: Elegant Penthouse in Prime Beverly Hills Location $1,045,000

441 N. Oakhurst Dr #702

441 N. Oakhurst Drive  Penthouse 702  Beverly Hills, CA 90210

3bedrooms, 2.5bath, 2126 sq. ft

Asking Price: $1,045,000

441 N. Oakhurst Dr #702 Beverly Hills CA 90210 002 005 006 008 010 011 012 013 014 014A 015 016 017 018 019 020 021 022 023 024 025 026 027 028 029 030 031 032

This elegant three-bedroom, two-and-a-half bathroom Beverly Hills penthouse offers stunning above-it-all views and an unbeatable location. Lounge on the large outdoor patio and soak up the mountain to city views, or walk to all the area has to offer. A Regency-style set of double doors opens into an entry way to the 2,196 sq.ft. unit. The step-down living area is over-sized and has a travertine fireplace. A balcony with sweeping views is at the end of the living area. A dining area is bracketed by corner walls of window that allow for ample light in the day and a carpet of city lights at night.

The large galley-style kitchen (with built-in appliances) is “open-ended” and provides access to the dining and living areas. Under-the-counter laundry machines takes the functionality of the kitchen to new heights. Richly-toned granite counter tops, and plenty of storage augment the kitchen’s offerings.

Bonus alert! It is a rarity in condominium floor plans that a unit have a family room/den area. But this unit has a perfect one. Its den area (with a wet bar) provides space for watching screeners or having an evening cocktail. Rounding out the public rooms is a convenient powder room off of the main entry.

The large master suite has a walk-in closet and double sinks. The two other bedrooms share access to a bathroom.

Pool, residents-only meeting rooms, two parking spaces (tandem) and controlled access make this unit a great value.

Please visit www.441oakhurstdr.com for more details.   OPEN HOUSE SUNDAY 1-4PM

Report: Home Prices Poised for Growth in 2013

In stark contrast to this time last year, the housing market is chugging into 2013 with a head of steam.

Home-listing prices were up 5.1% nationally in December on a year-over-year basis, according to data released Thursday by real-estate listings and data company Trulia. Out of the 100 major metro markets covered by the report, 82 of them saw year-over-year gains. At the end of 2011, asking prices had fallen 4.3%, and only 12 markets had posted positive price changes.

“Prices are going into 2013 with strong tailwinds,” said Jed Kolko, chief economist for Trulia. He cites a general strengthening of the job market, which in turn means more families able to cover a sizeable down payment. An increase in household formation, which is also the product of improving job prospects, and home construction could further bolster demand.

Mr. Kolko notes that the sharpest tightening of inventory is taking place in Western states. Four of the top 10 cities to see the largest asking price recovery were in California, including Oakland, San Jose, Sacramento and Fresno.

Las Vegas, which was hit hard after the bubble burst, came in at the top of the list with a 16.3% year-over-year listing price increase. In the same period in 2011, prices dropped 11.2%.

To be sure, even among the markets with major gains, some are better positioned for a sustained housing recovery than others.

While Las Vegas may have seen the largest asking price turnaround, it remains far below pre-bust levels. The problem, Mr. Kolko says, is that the market remains unstable, with high vacancy rates, lingering foreclosures and subpar job growth.

On the other hand, metros like Seattle, which came in second on the list of cities with the highest asking-price recovery, are on a smoother path to growth because of their strong economic fundamentals, he said.

Meanwhile, rents rose nationally 5.2% in the same period. In 17 of the 25 biggest rental markets, home prices are rising faster than rents, according to Trulia. Whereas ownership was typically more affordable than renting in most markets in recent years, as sales demand rises, that edge is becoming less apparent, Mr. Kolko said.