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Improved opportunities for first-time homebuyers

People in California considering entering the residential real estate market may have better opportunities to pursue first-time homeownership. Real estate prices have been on the rise since the end of the recession sparked by the 2008 financial crisis. While many homes dropped in value during the recession itself, for many, it was a poor time to seek a mortgage and invest in a new home. However, as people saved for down payments and prepared to apply for mortgages, real estate prices have continued to climb, putting homeownership outside of the reach of many younger people.

Homes in areas with strong economies and healthy job markets have seen competition among buyers, driving residential real estate prices up. Home sales have continued to rise, but housing costs have been rising above incomes. This has been especially true in major urban centers. While many existing homeowners were able to move up in this market, it presented a stronger challenge for people seeking a first-time entry into homeownership.

Understanding the commercial real estate market

California investors may be curious about the potential of entering the commercial real estate market, especially if they've already been active in residential properties. There are a number of unique characteristics that can make the commercial property market particularly appealing to investors. Commercial leases are often long-term, reducing the level of effort needed to keep or find new tenants on a regular basis, even though the negotiation of any particular contract may require additional work. In addition, as commercial properties are often multi-unit, investors can receive several revenue streams from one property.

There are multiple types of properties for commercial real estate investors to choose, including medical facilities, warehouses, office buildings, retail spaces, and storage areas. Even car washes and laundromats can be particularly profitables. They are often classified by grade. Grade-A properties are newer and well-located, grade-B properties require some work but have potential, and grade-C properties need significant renovations and are less conveniently located. In general, these are long-term investments that reap profits through years of ownership rather than through short-term growth. In addition, these investments can tolerate market fluctuations more readily than homes.

What online ADA compliance means for your small business

The Americans with Disabilities Act protects the rights and interests of those who have disabilities in various capacities. According to the ADA, small businesses must do certain things for disabled individuals who come to their business, as well as accommodate the needs of disabled individuals who work there. It can be a complex matter to determine whether or not your business is in compliance with the ADA.

One way that you may need to accommodate the needs of those with certain disabilities is by adjusting your website. Even with wheelchair ramps and other basic accommodations, you may still need to do things to ensure your website meets certain requirements. ADA compliance is a complex and difficult issue for California small businesses, and it may be in your interests to seek guidance regarding these matters. 

Conducting multiple real estate transactions at once

Individuals in California and other states may find themselves in a situation where they have to buy and sell a home at the same time. Choosing to sell a home first may be the better option. However, it may require asking for a rent-back clause in the purchase contract. This allows an individual to remain in the home and pay rent to the new owner until he or she buys a new house.

Those who are planning on buying a new home first may want to consider making it contingent on selling their current property first. Alternatively, it is possible to own both homes at the same time. However, this may put a person in a financially perilous situation. It is also worth noting that many sellers won't permit contingencies related to selling the home prior to the purchase closing.

Reasons why home sales have become sluggish

Californians may be interested to learn that home sales were down 4.1 percent in September 2018 compared to September 2017. This decrease arrived in spite of the fact that price appreciation has slowed and Millennial buyers are in need of larger living spaces. However, it should be noted that Hurricane Florence played a role in slower sales in the South. Furthermore, interest rates on home loans are going up. While they are now 4.72 percent, they were 3.83 percent at the same point in 2017.

Considering all these factors, it's easier to see why home sales are down. While price appreciation has slowed, home prices are still rising. The median price of a home was $258,100 as of September 2018. This was the 79th straight month that the median price went up. Those who are looking to sell their homes should also understand that September is generally a slower month for real estate transactions. Therefore, it may be necessary for sellers to remain patient regardless of market conditions.

The rise of proptech

Investors or business owners who are looking for commercial real estate should be aware that the CRE industry is poised to undergo a transformation due to proptech. In 2017, $12.6 billion worth of venture capital investments were made in proptech, which is real estate technology. That amount was three times what was invested in 2015. There are several proptech companies that are highly funded and developing applications that could change building management and occupancy experiences.

The satisfaction and utilization of real estate have not been closely evaluated, resulting in those aspects of the real estate industry being managed poorly with lasting inefficiency. Connection is an important factor in what gets measured, and measurement leads to management.

Homebuyers and unfamiliar neighborhoods

Purchasing a home is one of the most significant investments a California resident can make. That's why it is important that they do their due diligence when selecting a property. If the potential future home is in an unfamiliar neighborhood, there are some steps they can take to make sure that they are making the right choice.

Safety is a primary concern for many prospective homeowners. To determine if a new area is safe, buyers can contact the local police station to obtain information on crime within the jurisdiction. Local newspapers are also a good source of safety information as they usually have sections that report the recent crimes that occur within the community.

What is a "drive-by" ADA lawsuit?

California readers would probably not deny that people with disabilities should have the same opportunities as everyone else. Businesses should provide them access to buildings, bathrooms and other areas that would otherwise be off limits to them due to their disabilities.

Most businesses do their best to comply with the requirements of the Americans with Disabilities Act, but they may not always get it right. In these cases, it is reasonable for someone with a disability to point out an issue so that the business and/or property owner can correct the problem. Having said that, as the saying goes, "one bad apple spoils the whole bunch." Some people use their disabilities as a weapon against unsuspecting businesses.

Tips for younger home buyers

It may be hard to imagine buying a home in California or anywhere else before turning 30. However, there are many tactics a person can employ to accomplish this goal. Ideally, a home buyer will aim to make a 20 percent down payment to avoid paying mortgage insurance. That would mean paying $50,000 upfront to purchase a $250,000 home, but the buyer doesn't need to come up with that cash on his or her own.

Government assistance programs or gifts from family members may make it easier to cover that initial payment. One of the key metrics that a lender looks at when determining if a borrower qualifies for a home loan is his or her debt-to-income ratio. Lenders typically want individuals to have a DTI of 36 percent or less to be eligible for a loan. Borrowers can get under this limit by paying down credit card or student loan debt before applying.

Commercial prices likely to remain flat

According to Green Street Advisors, commercial property prices are likely to remain stable for the next several months. Furthermore, as the Federal Reserve raises interest rates, there could be a flip in the yield curve, which may signal weaker economic conditions ahead. Data from Real Capital Analytics (RCA) found that year-over-year price growth as of July 2018 was half of what it was in the early part of 2015.

However, it is important to note that price growth was partially dependent on the type of property a person owned. For instance, student housing and manufactured homes were doing better than strip or regional malls. The multifamily sector posted yearly growth of 12 percent according to RCA's CPPI. Over the next several months, it is believed that there will be money available for those looking to get into the commercial real estate sector. Furthermore, it is expected that debt will be relatively inexpensive to acquire.

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L. Scott Karlin

L. Scott Karlin

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David E. Karlin

David E. Karlin

David E. Karlin is a California attorney with a primary focus on business and real estate, including law and legal issues...

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Michael J. Karlin

Michael J. Karlin

Michael J. Karlin is a Southern California based attorney whose practice primarily focuses on Entertainment Law. Michael began...

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