12 indicted in alleged Southern California ‘green’ loan and mortgage fraud scheme

LOS ANGELES — A dozen people have been indicted in connection with an alleged mortgage fraud and “green” loan scheme that operated throughout Southern California and resulted in losses of about $15 million, the California Attorney General’s Office announced Wednesday.

The 133-count grand jury indictment, handed up April 26, alleges that the crimes occurred in Los Angeles, Riverside and Ventura counties.

The indictment charges the defendants with a variety of counts, including conspiracy, mortgage fraud, grand theft, identity theft, forgery, filing a false or forged document and money laundering.

The defendants allegedly exploited the Yrgene Energy Fund and Renew Funding, companies that provide funding to licensed contractors for energy- efficient home improvements for homeowners, and used false identities to get mortgage loans from conventional banks and hard money lenders, according to the Attorney General’s Office.

“The allegations against these defendants charge a pattern of disregard for the law and willingness to go as far as stealing the identities of the deceased just to further their scheme,” California Attorney General Rob Bonta said in a statement announcing the charges. “Our office will seek to hold these defendants accountable for their alleged actions.”

Those named in the indictment are: Tamara Dadyan, 39, Richard Ayvazyan, 42, Artur Ayvazyan, 41, Grigor Tatoian, 50, Andranik Petrosyan, 46, Arshak Bartoumian, 48, Artashes Martirosyan, 43, Lilit Malyan, 39, Lubia Carrillo, 41, Rosa Zarate, 49, Estephanie Reynoso, 31, and Vanessa Bell, 60.

Eleven of the defendants have pleaded not guilty, with Malyan due back in a downtown Los Angeles courtroom for arraignment May 18.

The case stemmed from a multi-year investigation by the Los Angeles Police Department, with assistance from the Federal Housing Finance Agency, Office of Inspector General.

The attorney general lauded the two agencies for “their work to put an end to an extensive, six-year fraud scheme that resulted in the theft of an estimated $15 million.”

“If you were a victim or have information please call 213-486-6979,” said a tweet from LAPD Capt. Lillian Carranza.

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Do buyers stand a chance in this heated real estate market?

I read with great interest last week, Leslie Eskildsen’s column on a relatively new residential listing class known as Registered Status.

If your unfamiliar – as was I – here are the Clif notes. A seller hires a broker to sell his house by executing an agreement. Twelve choices are given – among them – active, coming soon or registered. If “registered” is chosen, the broker may share the information with agents employed beneath the broker’s license – but not with the Multiple Listing Service.

Read: Cooperation is eliminated and the pool of potential purchasers is pruned to those represented by the broker. In today’s robust seller’s arena, buyers are more plentiful than houses available for sale. The transaction occurs free of hassle, multiple tours and myriad proposals. Do sellers leave shekels on the counter? Maybe. But that’s the seller’s prerogative. Wow!

OK. You may be wondering what any of this has to do with commercial real estate as that’s my forte. Indulge me as I relate a few similarities.

The residential market typically precedes commercial by nine to 18 months. If you’re curious about the future landscape for commercial real estate, just watch what’s happening residentially.

In 2007, residential sales plummeted due to the sub-prime mortgage meltdown. CRE didn’t feel the pinch until late 2008. Social media marketing took root with residential agents well before any of us used Facebook, Instagram, YouTube or Twitter to broadcast our listings. Will “registered status” become a thing with our inventory? My prediction is yes!

A type of registered status already exists. Some brokers already employ a form of registered status marketing. Here’s an example: If a seller engages me to peddle a freestanding 10,000 square foot manufacturing property in Anaheim, I can generate 10 offers with 10 phone calls.

A recent land sale we made was preceded by a select “invitation to offer.” The competition was fierce and the resulting comp set the new high price. If you have a buyer for a leased industrial building in the Inland Empire, and the offering is listed, chances are there is no fee for the buyer’s side.

Buyers are at an extreme disadvantage. Akin to a season of “The Bachelor,” sellers have their pick of qualified purchasers and may present the rose to anyone they choose. It’s quite common for avails to hit the market un-priced. We are given “guidance” as to the seller’s expectations. Plus, water in the Mojave is more plentiful than buildings to buy.

All of these factors have pushed pricing up 32% since October 2020! If something hits the market – you must take the Gretzky approach. Skate to where you believe the puck will be.

The traditional deal structure also is waning. It used to be — before this crazy activity — a buyer could expect to receive a reasonable time to secure financing, clear title and inspect the roof for leaks – all while under no obligation to close if something untoward was discovered. Now? Forget it. You’re lucky to get any time to conduct due diligence – without money at risk.

Buyer reps MUST innovate. If your business is representing buyers or tenants, you must manage your client’s expectations. In a recent round of talks, we offered a number 13% higher than the last market sale, non-refundable money on day one and no financing contingency.

We didn’t get a counter! Why? Even though our deal was not conditioned upon us getting a loan, we still needed financing. Confusing? Yes. But we were willing to risk it – and with a large sum of money as the assurance to the seller. In effect, we were told, “Show us the money”! Prove the funds in a liquid account equal to the purchase price or no deal.

In the darkest days of 2009-2011, sellers were at a disadvantage. Not anymore!

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. 

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Saying goodbye to a real estate legend

The commercial real estate industry lost a lion this week. Bill Lee died April 5, surrounded by family. We are deeply saddened by our loss but grateful that Bill suffers no more and is with the Lord.

Many of you knew Bill, transacted deals with him and had great respect for his business prowess. In honor of the life Bill led and the impact he had on our business, I revived a column I wrote in 2019 in his honor. Rest well, my friend!

While at a real estate summit in Las Vegas a few years ago, I re-connected with Bill. It was so great to see Bill and spend some time with him. Bill, unfortunately, had been absent from recent summits. And while I missed him, the cool thing was, it felt as though we talked weekly. Bill was legendary, but how did he become a legend? My thoughts …

Bill observed a problem. He was the top guy at Grubb and Ellis before Nixon was a crook. He was the most competitive guy I’d ever met. But, Bill realized that intra-office competition was wreaking havoc on the greater good of the office.

He tells it like this. “I had a 30,000-square-foot listing. A competitor in the cube next to me had a 30,000-square-foot occupant requirement. I didn’t tell him about my listing because I didn’t want him to get part of the fee. The culture of the office dictated that approach.”

Bill later realized the “company” suffered and created a platform that used profit-sharing and rewarded cooperation while still encouraging competition. This was heady stuff, folks. Talk about disrupting the way in which commercial real estate is brokered. WOW!

Bill had the courage to change. Great, there was a problem. Now, Bill had to convince some fellow brokers that change was the key to their collective future. Getting brokers to change anything is tantamount to separating conjoined twins.

But, Bill, ever the persuader, convinced a small band of brothers to follow him into the cooperative abyss. John Matus, John Sullivan, Mel Koich, Larry O’Brien, John Vogt, Tom Casey, Dennis Highland, Len Santoro, Bart Pitzer, and Bill’s college friend, Al Fabiano, heeded the siren call and left the building.

Bill had a tireless vision. One of the other old-timers and I were marveling at how those 11 guys, in an executive suite in El Toro, created a company that now boasts 65 global offices, close to 1,200 agents, billions in revenue, an international presence, coast to coast visibility, and the best place in the world to transact commercial real estate. Period!

I asked Bill if he ever, in his wildest dreams, believed the company would someday be this big. He looked at me rather puzzled and said, “Of course! Once we got your Orange office opened, I knew we were on our way to becoming an international company.” Talk about tireless vision.

Bill got out of the way. At a certain point, Bill realized that for Lee & Associates to grow, he needed to step away and let the eaglet fly. Knowing Bill as I do, this was warranted but was the toughest thing for him to accomplish.

Bill along with Craig Coppola, a recent William J. Lee lifetime achievement winner, authored a book titled Chasing Excellence, Real Life Stories from the Streets. It is available online and in book stores.

So, want to become a legend? Just do those four things. Simple, right?

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. 

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Random real estate thoughts: Strange market days and a reminder to live fully

Well, we are clipping along at warp speed – three months of 2021 in the books. But, occasionally, several issues burden my inbox. Therefore, please consider this column a “spring cleaning” of sorts.

Two recent appearances

Recently, I was honored to sit on a panel of commercial real estate experts and as a guest on a radio show. The cool thing was I never left my garage office. The Institute of Real Estate Management panel was conducted via Zoom and the radio spot over the phone. Coincidentally, both had similar themes: What impact has the pandemic had on commercial real estate?

Of course, the answer depends on CRE genre — industrial, office or retail. The differences between the three are as stark as the Mojave desert. Chances are if your company makes or ships things, you’ve high-fived your employees for a record 2020. Conversely, if you visit a suite of offices, you can bet the tenants are considering how to reduce their square footage, when the workforce will return – if ever – and how to conduct business in a hybrid environment, both virtual and in person.

Shortage of Inventory

Never, in all my years have I seen the shortage of industrial inventory this skimpy. At the same time, vacant regional mall space abounds.

You may be thinking, why not simply convert that vacant Sears store to a logistics hub? Good thought! But, the challenges lie with zoning and the physical plant.

Simply, that behemoth store that formerly housed more Craftsman tools than the Carpenter’s Union once generated monster sales taxes for its city. Warehouses don’t. Plus, modern industrial buildings are equipped with much higher ceilings, so the cost to retrofit would be mammoth.

Prices, prices, prices

The acute lack of available industrial space has caused prices to jump higher than a Gonzaga player at the buzzer. Yeah. Maybe next year, Bruins. But I digress. In one small slice of the Inland Empire East and in a sliver of sizes, we’ve seen was a 12% hop in pricing — in just four months!

My favorite time of year

NCAA Final Four, MLB opening days, Masters golf tourney, the fragrance of Orange blossoms, more daylight. All are experienced this time of year!

Considered: A tournament basketball game is akin to my profession – you lose, you go home. Consolation doesn’t pay the bills. Professional golfers start their year the same way brokers do – at zero earnings with no safety net.

Finally, 162 baseball games over six months is a marathon. Some of our deals are long races as well.

Live, live, live

Three of my close friends have gone home to the Lord in the last 30 days. I’m reminded. This is not a dress rehearsal. It’s caused me to focus on what’s important. I’ve squeezed my loved ones a bit tighter, looked past petty squabbles and choose to live each day as though it may be my last.

Rest In Peace Erik, Kevin, and Mike!

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. 

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Is the grass always greener somewhere else?

Much has been written about businesses vacating California. One “catcher’s mitt” state has even coined the phrase “Texodus” to describe companies bolting California for the Lone Star state.

Catchy indeed.

Another city has erected a mock Statue of Liberty on its strip – “give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore…”. Who knew that would be applicable to enterprises seeking asylum from California in a business-friendly environment?

Finally, governors are racking up frequent flyer miles traveling here to recruit our manufacturing base. The promise of economic incentives, cheaper houses, and smaller tax burdens lure our local operations to consider an out-of-state move.

But is the grass really greener?

Certainly, the decision to move – in addition to the carrots aforementioned – is a complex matrix of workforce availability, quality of life, affordable utilities, access to raw materials, logistics considerations, and to a small extent, the cost and availability of commercial real estate to house the organizations. That small slice – vacant locations – is the subject of this column.

So, I got my Jon Lansner data cap on and examined several metropolitan service areas around the United States. Compared were available Class-A 100,000 square foot (used was a range of 75,000-125,000 square feet) industrial buildings built after 2000. Considered were the existing square footage – both vacant and occupied, number of spaces available, average asking lease and sale prices. Also, a benchmark for SoCal was included. All that was missing was Jon’s trusty spreadsheet.

Los Angeles County: 6,431,024 square feet existing and under construction with 35 buildings available; average asking lease rates $1.03 psf; average asking sale price $357 psf.

Orange County: 1,707,949 square feet existing and under construction with three buildings available; average asking lease rates $.93 psf; average asking sale price $$296 psf.

Inland Empire east and west: 7,099,294 square feet existing and under construction with 10 buildings available; average asking lease rates $.66 psf; average asking sale price $170 psf.

Las Vegas: 1,888,928 square feet existing and under construction with six buildings available; average asking lease rates $.74 psf; average asking sale price $260 psf.

Salt Lake City: 2,576,011 square feet existing and under construction with 10 buildings available; average asking lease rates $.57 psf; average asking sale price $150 psf.

Denver,: 4,139,989 square feet existing and under construction with 31 buildings available; average asking lease rates $.73 psfl average asking sale price $162 psf.

Chicago: 9,810,710 square feet existing and under construction with 28 buildings available; average asking lease rates $.52 psf; average asking sale price $99 psf.

Columbus, Ohio; 792,518 square feet existing and under construction with four buildings available; average asking lease rates $.54 psf; average asking sale price $105 psf.

Nashville, Tennessee: 1,555,186 square feet existing and under construction with seven buildings available; average asking lease rates $.62 psf; average asking sale price $94 psf.

Dallas Fort Worth, Texas: 11,749,896 square feet existing and under construction with 53 buildings available; average asking lease rates $.48 psf; average asking sale price $90 psf.

Houston: 9,695,070 square feet existing and under construction with 41 buildings available; average asking lease rates $.58 psf; average asking sale price $84 psf

Atlanta: 5,464,511 square feet existing and under construction with 15 buildings available; average asking lease rates $.50 psf; average asking sale price $90 psf.

Jacksonville, Fla: 452,611 square feet existing and under construction with one building available; average asking lease rates $.30 psf; average asking sale price $73 psf.

Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104. 

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Strangers touring your house listing? How to keep things safe, secure

We’ve had to find new ways to do many things this year – including washing our hands almost incessantly, wearing a mask, and if you have ventured out to patronize a local restaurant when outdoor dining has been allowed, you’ve most likely been eating in a repurposed parking place under an EasyUp in a folding chair.

You may want to consider some new ways to keep your things safe and secure if you are selling your house. Here are few tips for prepping the house for showings, in addition to all the coronavirus protection measures.

Make sure your home office and home classrooms are impervious to unwanted intrusion.

Certainly don’t leave the list of passwords on your desk, pinned to a bulletin board, written on a whiteboard, on a sticky note on your computer screen, or in your pencil drawer. When it is possible and practical, pack up your laptops and take them with you when you go sit in your car while buyers are in your house. If you have a traditional “tower” computer, shut it down completely before the buyers arrive. In addition, put away your phones, tablets and chargers and any other small electronics, if you are not taking them with you.

Stash away your prescription medicine.

Regardless of the dosage, purpose or number of pills in the bottle, either take your meds with you or lock them up somewhere safe while buyers are in your house. These items are so small, they are easy to quickly pop into a pocket or purse. Put them away in advance of a showing so they are impossible to find for anyone other than the person for whom they were prescribed.

Without question, put all jewelry in a safe place that is inaccessible and undetectable.

This may be a great time to invest in an actual, physical safe that can be both locked and secured. Depending on the size, many such safes can be secured to a wall, preventing them from being scooped up for breaking into at another time. You might also consider storing your meds in the safe!

If you keep firearms in your home and don’t already have a gun safe, now’s the time to bite the bullet.

You must secure your guns and ammo, especially when inviting strangers into your home. Just like loose change, there’s currently a shortage of ammunition, making it a likely target for theft. Make it impossible for anyone to access your guns and ammo. And if you keep a loaded weapon in your home for your personal protection, you must rethink this when buyers are visiting. If your gun safe is large enough, you may also be able to secure all of the other valuable items there as well.

We’ve all witnessed creative solutions to these unusual circumstances, do not underestimate the measures desperate people will use to survive, potentially at your expense.

Leslie Sargent Eskildsen is an agent with Realty One Group West. She can be reached at 949-678-3373 or leslie@leslieeskildsen.com.

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Top Workplaces 2020: Optimum Professional Property Management puts its people first

Mention homeowner’s association and many cringe, envisioning monthly dues, strict enforcement of rules and limits on everything from what color you can paint your house to the kinds of business activities you can engage in from home.

In many cases, all of those rules and more are in place — for a reason. They preserve the character of the neighborhood while also protecting property values. And when it comes to homeowner’s associations, Optimum Professional Property Management knows a thing or two. The Irvine-based company — in business since 1996 — currently manages 127 HOAs throughout Southern California.

CEO Debra Kovach says Optimum has maintained a steady and stable path of growth, not only in staffing and its client base, but in technology and social media awareness. She notes that about a quarter of the company’s 53 employees have been with the company for 10 years or more. That culture has landed the company on the annual “Top Workplaces” list of honorees two times before.

Optimum’s commitment is reflected in comments employees made in a Top Workplaces survey:

“I am encouraged to be my best and am given opportunities for advancement,” one worker said. “It’s a family environment where everyone is supportive and genuinely cares about each other.”

Optimum generated about $6 million in revenue in 2019. The company hired five employees over the past 12 months and expects to hire five to eight more over the next year. We asked Kovach to talk about the business of managing HOAs and how the company has adapted to the current health crisis.

Q: As a business that manages homeowners associations, you’ve likely had to make changes during the COVID-19 pandemic. How are things different?

A: In March we had to close our office to the public and set up everyone to work remotely. Since then we have brought back essential team members who need to be in the office to conduct business such as cutting checks, issuing parking permits, keys and remotes, etc. We still have some team members who are working remotely, either due to childcare issues or because their job responsibilities do not require they work from the office.

Q: Have your employees encountered any resistance from residents in regard to policies that may have changed during the pandemic?

A: Yes, the biggest issues we have faced were from homeowners who were upset that the pool or tennis court facilities were closed. There were many angry and irate homeowners that we are still having to deal with.

Q: What kinds of things does Optimum do to make its employees feel valued?

A: We give pay increases without the employee having to ask when we recognize excellent performance. We also give shoutouts to team members who go above and beyond or do something acknowledgment worthy. We have a “culture club” committee that meets every month to create ways to have fun in the office and acknowledge special events or milestones.

We are driven by the idea that a strong customer service-oriented philosophy will keep us at the top of our game. We thrive on a strong team culture and overall positive attitude which enables us to work well with each other and our business partners.

Q: What’s the biggest challenge in managing homeowners associations?

A: Finding and keeping community managers who want to do the job. It is very demanding and requires a lot of evening meetings.

Q: Are there any recent laws or pending legislation that have or will impact how Optimum does business?

A: Yes, a new election law effective Jan. 1, 2020 requires us to entirely revamp our internal procedures for handling annual membership meetings and elections which created more work for the staff.

No. 5 Small business: Optimum Professional Property Management

Founded: 1996

Industry: Homeowners association management

Headquarters: Irvine

Employees: 53

Website: www.optimumpm.com

Quote: “We thrive on a strong team culture and overall positive attitude which enables us to work well with each other and our valued business partners.” Debra Kovach, principal and CEO.

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Did you recently move from L.A. to the Inland Empire?

Apartments are filling up in Riverside and San Bernardino counties, driving up rents. At the same time, rents are dropping in Los Angeles County and vacancies are up.

If you recently moved from L.A. County to the Inland Empire, we want to talk to you to find out why you left L.A. and what drew you to the I.E.

Was it because of the pandemic? Are you seeking lower rents while working from home? Have the on-and-off closures of restaurants, bars and other amenities killed the attraction of urban living? Or did you move for the usual reasons that have nothing to do with the pandemic: A new job, to be closer to friends or family, better schools, bigger homes or simply to save money?

Whatever the reason, we’d like to hear from you.

Please fill out our short survey. A reporter from the Southern California News Group may contact you later for more information.

To take the survey, CLICK HERE.

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Coronavirus twists Southern California housing: Slowest sales, highest prices

Southern California house hunters, challenged by a pandemic, bought the fewest homes in any June on record while record-low mortgage rates helped push the median selling price to an all-time high.

DQ News/CoreLogic reported on Wednesday, July 22 that buyers closed purchases of 17,678 residences — existing and newly built — in June in the six-county region. That’s down 15% in a year as sales fell across SoCal. It was the slowest-selling June in a database that dates to 1988 and was the third consecutive monthly record low for local homebuying.

Stubbornly high unemployment, due to “stay at home” orders designed to limit the coronavirus’ spread, has been a drag on the entire economy, including the home-selling businesses. In addition, many homeowners have chosen not to sell — perhaps fearful of the virus or the fate of their finances. Overall, that cut house hunter’s choices, depressed sales and helped nudge up prices.

Here are five things we learned about the local housing market in June, when homebuying and prices went in opposite directions …

1. June’s balloon

As business limitations were loosened throughout the spring  —  and the real estate industry better adapted to pandemic restrictions — June’s sales improved 44% from May.

That’s the largest May-to-June gain on record and the eighth-largest one-month jump for any month since 1988.

Recent pending sales stats from Zillow show newly opened escrows in Los Angeles and Orange counties were close to year-ago levels as of July 11, with the Inland Empire up 10%. This suggests closings could be back to normal levels later this summer.

“I would argue that we’ve already seen plenty of evidence of a rebound in closed sales consistent with the uptick in pending sales since mid-April,” said Jordan Levine, the California Association of Realtors’ deputy chief economist. “We still have a long way to go to reach full recovery, but the market certainly clawed back a significant chunk of April and May’s lost ground.”

2. Record prices

June’s successful homebuyer paid more to win what’s been a rare find: Homes to buy.

In mid-July, for example, the number of existing homes listed for sale was down 27% in a year in Los Angeles and Orange counties and down 26% in Riverside and San Bernardino counties, according to Zillow.

That short supply was a key reason why the region’s median selling price hit an all-time high of $555,500 in June, according to DQ News — up 2.9% over 12 months. That broke March’s all-time high of $550,000 as record highs were also set in Los Angeles, Orange and San Diego counties.

“It’s likely true that unemployment has knocked some would-be buyers out of the running, but home shoppers are combing over a very limited set of options,” said Jeff Tucker, a Zillow economist.

Do not forget that cheap money is helping the housing market. Mortgage rates, pushed lower in an attempt to stimulate a depressed economy, have fallen from an average 3.7% in December to 3.2% in June.

And this month the 30-year rate fell below 3% for the first time.

3. Builders benefit

Local builders fared relatively well in June, selling 1,692 new homes, down just 7% in a year. Builders got a $558,000 median price — essentially flat in a year.

Having a supply of unsold new home inventory boosted builders’ share of sales in the region to 9.6% vs. 8.7% a year earlier.

Meanwhile, the resale market for existing homes suffered.

Sales of single-family houses totaled 12,472, down 15% in a year. The median selling price was $590,000 — a 3.7% increase over 12 months. Condos fared worse with 3,514 sales, down 18% over 12 months. Median? $470,000 — a 2.8% increase in a year.

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4. Coastal challenge

The sales slump was decidedly deeper by the coast where prices tend to be higher.

Los Angeles County was hit hardest with 5,063 sales, down 24.3% over 12 months. The L.A.median price was $643,000 — up 4% in a year. Ventura County’s 781 sales were down 23.9%. The median of $600,000 — was up 3.5%. Orange County’s 2,447 sales were down 22% as the median price rose 4% to $765,000.

Breaking that trend was San Diego County. Its 3,557 sales were off only 2.4%, the region’s smallest dip, as its median of $600,250 was up 1.7%.

Prices rose sharply in the Inland Empire, the region’s housing bargain.

San Bernardino County had the second-smallest homebuying decline: 2,501 sales, down 3%. It’s SoCal’s cheapest spot with a median of $365,000 — after a 7.4% increase. Riverside County had 3,329 sales, down 12%. Its median of $430,000 — was up 7.8%.

5. Resurgent doubt

Acting fast seems to be common advice in a summertime market with limited choices and folks looking the cash in on cheap mortgages.

As of July, an existing L.A.-O.C. home went into escrow after just 19 days after listing – nine days faster than the same time last year. In the Inland Empire, it took 21 days — 11 days faster than the same time last year.

But the virus still has its say on the economy, and a recent surge in cases, hospitalizations and deaths — and the state’s ensuing U-turn on business reopenings — leaves room for doubt.

“There is certainly concern among some of the potential home buyers about the outcome of the COVID-19 crisis, however there still remains a solid buyer demand which is reflected in the further push of home prices,” said Selma Hepp, deputy chief economist at CoreLogic. Her firm recently forecast what would be the first drop in local home prices in eight years.

“Resurgence of the pandemic in the Southern California region will likely put a damper on future demand and will cause further uncertainty among buyers,” she said.

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Market peak? Southern California homebuying drops, 1st dip in 11 weeks

Southern California house hunters put 3% fewer homes into escrow in the most recent week, the first homebuying drop in 11 weeks.

Zillow’s weekly report on activity from brokers’ listing services in Los Angeles, Orange, Riverside and San Bernardino counties shows the housing market’s first slip amid a rebound from economic turmoil created by the coronavirus pandemic.

With 3,647 existing homes put into escrow in the week ended July 4, the buying pace is 1% above a year ago. Bear in mind, the holiday weekend could be a factor in the cool-off.

Finding something to buy is a challenge. Southern California owners listed 4,592 homes for sale in the week — up 2% vs. the previous week but down 18% in a year. That put total inventory at 28,068 — down 1% vs. the previous week and down 29% in a year.

Record low mortgage rates have put house hunters in a buying mood since early April. But the durability of an employment rebound is now in question. A recent spike in COVID-19 infections has forced a slowdown, if not reversal, of some business reopenings.

This economic uncertainty led CoreLogic to forecast a drop in Southern California home prices. The data tracker predicts Los Angeles County prices will drop 6.3%, Orange County 5.2%, and the Inland Empire 2.4% in the coming 12 months.

Here’s how Zillow’s July 4 data broke down in Los Angeles and Orange counties …

New escrows: 2,100 contracts signed — down 4% in a week; up 14% in a month; down 6% over 12 months.

New listings: 2,821 over seven days — down 1% vs. the previous week; down 2% in a month; down 16% in a year.

Total inventory: 17,450 homes on the market — up 0.2% in a week; up 3% in a month; down 26% over 12 months.

Median list price: $923,178 — up 1% vs. the previous week; up 4% in a month; up 9% in a year.

Selling speed: 19 days, median time for homes entering escrow from listing, 8 days faster than this time last year.

In the Inland Empire …

New escrows: 1,547 — down 1% in a week; down 2% in a month; up 11% over 12 months.

New listings: 1,771 — up 7% vs. the previous week; down 6% in a month; down 20% in a year.

Total inventory: 10,618 — down 3% in a week; down 10% in a month; down 34% over 12 months.

Median list price: $446,760 — up 1% vs. the previous week; up 3% in a month; up 5% in a year.

Selling speed: 21 days, median time for homes entering escrow from listing, 11 days faster than this time last year.

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Statewide …

New escrows: 8,214 — down 0.3% in a week; up 7% in a month; up 14% over 12 months.

New listings: 10,364 — up 1% vs. the previous week; down 10% in a month; down 20% in a year.

Total inventory: 46,847 — down 3% in a week; down 11% in a month; down 41% over 12 months.

Median list price: $697,571 — up 1% vs. the previous week; up 8% in a month; up 16% in a year.

Nationally …

New escrows: 82,488 — down 4% in a week; down 0.04% in a month; up 13% over 12 months.

New listings: 124,516 — down 2% vs. the previous week; down 8% in a month; down 27% in a year.

Total inventory: 1,097,755 — down 1% in a week; down 2% in a month; down 22% over 12 months.

Median list price: $338,760 — up 0.5% vs. the previous week; up 3% in a month; up 4% in a year.

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