Real Estate Darwinism

Here on our Long Beach Real Estate site I usually write purely real estate related articles targeted at educating and informing buyers and sellers of Long Beach Real Estate. Today I would like to give you a little peek into the business side of things and explain how they can affect the sale or purchase of your Long Beach homes.

In a recently published post I disclosed the 2008 closed sales in Long Beach; 674 of them, through 4/30/08. While the chart shows the sales increasing each month, the sales figures are still very low. (Includes sales of homes, condos, lofts, co-ops, Oyos, 2-4 units and 5+ units as recorded on the MLS)

• Jan 130
• Feb 153
• Mar 179
• Apr 212
• Total: 674

These are difficult times for those of us surviving in the real estate industry. Going into this down market there were about 2900 licensed Realtors on record, there are currently about 1600 licensees active in the Long Beach area. Every market will support a certain amount of agents based on the closed sales of that market. Each agent needs a certain amount of closed sales in order to survive. Lets assume that 8 to 10 closed sales for the year are required for a Realtor to even survive this market; 674 closed sales would produce 8 to 10 sales for the year, for between 200 and 250 Realtors. Those sales are currently spread across 1600 current licensees, which would equate to less than ½ of a sale for each Realtor for the first 4 months of 2008.

In the real estate industry we have an 80/20 saying. It states that 20% of the agents do 80% of the business. 20% of 1600 agents = 320 which would equate to about 2 closed sales for the majority of the 20% still doing business.

So how are 1600 Realtors surviving a market with sales that will currently only support 200 to 250?

• Some have other income, or a spouse or significant other with income.
• Some have taken on Part or Full time jobs, while trying to juggle their real estate.
• Some have anticipated this market and made plans to survive it.
• Some are making enough sales to manage.

What of the 80%? That is 1280 agents, still active, for the last 4 months. How are they surviving with little or no sales? Well, they either have spousal support a trust fund or they have accepted salaried positions. Lets take a look at that. Real estate is a more than full time job; it is a commitment which permeates every hour of every day of our lives. Real estate transactions require a lot of attention on a daily basis. Escrow, title, lenders, inspections, appraisers banks and more need to be attended to, mostly during normal business hours. Buyers need to see properties around their schedules which often means after work or weekend showings. Sellers properties often need tending, flyers run out; keys go missing from a lock box or end up in another box on the same property. A pipe may burst on a listing with an out of town owner; anything can happen. How is an agent who has accepted employment elsewhere, with a set schedule, going to be able to deal with the schedule and responsibilities of a full time Realtor? How does that affect the buyer or seller? Has the agent even disclosed to the buyer or seller that they are not fully available? Do you know if your agent is available to conduct business, full time on your behalf?

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Long Beach Own Your Owns - OYOs

What the Heck is an OYO?

Why would I want to own one?

Long Beach has been home to many Own Your Owns over the years. They can be found throughout Downtown Long Beach, Alamitos Beach, Bluff Park and into Belmont Heights; older, usually 2 or 3 story buildings tucked between newer and sometimes taller buildings.   Recent Condo Conversions have trimmed the numbers of available OYOs considerably. OYOs used to be a really good investment, selling for considerably less than Long Beach Condos, they proved to be a very desirable purchase. When they successfully converted to condominiums owners realized large profits.  Often condo conversion was the motivation for purchasing an Own Your Own. 

Many buyers ask about OYOs.  They want to know if they are the same as a condo, or more like a stock cooperative. 

OYOs are similar in ownership to condos in that they are both fee simple ownership with individual tax bills and deeds. OYOs are a pre-condominium form of ownership, mostly built in the 50s. They generally sell for less than condos and are occasionally candidates for condo conversion, if they qualify, at which time they increase in value dramatically. Often OYOs will not have sufficient parking to qualify for condo conversion. 

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Long Beach California Real Estate Sales Update

January - April 2008

The real estate market in Long Beach has begun to shift.  We have witnessed a steady rise in homes and condos for sale in Long Beach since the beginning of the year, as is witnessed by the chart provided.  Buyers who have been waiting out the real estate market hoping to get that incredible deal are now buying those Long Beach homes and condos they have been wanting. 

Interest rates are still great, although lenders are tightening up on lending standards.  It is getting more difficult to procure a home loan unless your income and credit scores are high, your credit history is good and your debt ratio is low.  As we progress into the summer months lending standards will become even more stringent.   

• Long Beach Mortgage Rates Reports

If you are one of the consumers who has been sitting on the sidelines waiting for Long Beach real estate prices to drop before you begin your buying process, you might want to speak to a mortgage lender pretty soon.  Run your credit, find out if you qualify for a home loan sufficient to make that purchase.  You may also decide to go ahead and buy now while Long Beach prices are low, some concessions are still being granted and home loans are still available to consumers with less than pristine credit. 

• Long Beach Homes & Condos-7 Steps to Pre-Home Purchase Preparedness 
• Buying Your Long Beach Home - Getting Started 
• Long Beach Home Search-Where do I start? 
• New FHA Loan Limit For Long Beach Homes
  
• Long Beach Homes - To Buy or Not To Buy? 
• Long Beach Homes and Condos - Negotiating Your Offer 
• Long Beach Home Ownership - 1st Time Home Buyers and The American Dream 

 Real Estate Sales in Long Beach California - 2008 - Year to Date

• Long Beach Homes and Condos Market Report-Jan-Dec Home Sales 2007 
• Long Beach Income Property Market Report-January-December 2007-Including Signal Hill 
• Downtown Long Beach Stock Co-operatives 

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I remember when I first moved into Long Beach and drove past Colorado Lagoon.  In my own New York way I asked my friend 'Whats with the swamp?.  It was looking pretty raggy way back then, but as they say, its come a long way baby! Yesterday I was driving by, it was such a pretty day and the park was so peaceful, I pulled over and took a few pictures. 

Colorado Lagoon is comprised of 41.63 acres of wetland and Marine Education Science Center and is located at 5119 E Colorado St.; they can be reached at (562) 570-1720. Colorado Lagoon Park is bounded on the West by Park Ave; on the South by E Appian Way and E Colorado St; on the North by E 6th St. and Recreation Park 9 Hole Golf Course; and on the East by Monrovia Ave, E 4th St, Haines Ave, E Vermont St., and Orlena Ave. 

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Are You thinking about Buying a Home in Long Beach?

When beginning the home buying process the best place to start is by getting pre-approved by a great lender.  Being pre-approved for your home loan not only assures you that you are shopping within your price range, it also equips you with the ability to make an offer immediately when you locate the home of your choice. 

When you speak with the lender of your choice, ask them if they will be able to provide you with a lock-in letter and a written loan commitment.  These items assure you that the loan is actually in place and that both the interest rate and the terms of the loan will be intact when you are ready to close escrow. 

There are currently less Long Beach homes on the market than prior months.  Over the winter months we had more, but less desirable inventory.  Todays Long Beach Real Estate Market is providing better and more desirable choices for home buyers causing many Long Beach properties to receive multiple offers.  It has been rare for offers to go much above asking price, however sellers are making choices based on the terms offered and the strength of the offer and the loan. 

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