Realty Digest November 2022 by Scot Campbell

REALTY DIGEST November 2022 / Circulation 17,500 Monthly / www.ScotCampbell.com Downtown HB | Seacliff | Edwards Hill | Huntington Harbour | Sunset Beach | Brightwater

6671 Silent Harbor | Huntington Beach | List $3,999,900

Guard Gated Community | Remodeled | 4 Bedrooms + Retreat | 4.5 Baths | Bonus Room | 4417 SqFt 3 Car Garage + Gated Parking Court | Pool & Spa | Outdoor Fireplace | Built-in BBQ | 8584 SqFt Lot Come join the elegant coastal lifestyle offered by the guard gated Boardwalk Development located just a few blocks from the soft sands of Huntington Beach. The home is located on a quiet cul-de-sac street and has a back yard designed for entertaining.

For More Photography & 3D Tour Visit: www.6671SilentHarbor.com

SCOT CAMPBELL, Global Luxury Specialist COLDWELL BANKER-Campbell Realtors 714.336.0394 Mobile scot@campbellrealtors.com www.scotcampbell.com DRE #00943759

Happiness is Finding the Next Place you Want to Live

Have Fun Investigating Areas at: www.MyMoveMeter.com Housing Affordability | Quality of Life Job Market | Living Affordability

SCOT CAMPBELL | Global Luxury Specialist | COLDWELL BANKER-Campbell Realtors 714.336.0394 Mobile / scot@campbellrealtors.com / www.scotcampbell.com / DRE #00943759

How’s the Huntington Beach Market?

The “Days of Supply” is the best indicator of market conditions. The reading jumped from a record low of 20 days in February up to 97 days on October 27th 2022 indicating a rapid shift from strong “Seller’s Market” conditions to a level consistent with a “Balanced Market”.

The graph illustrates market conditions over the last eight years. The market reaction to the elimination of the mortgage interest deduction can be seen in Q4 2018 and Q1 2019. The immediate “CV-19 Shock” is visible in April-May 2020, followed by the Strongest Seller’s Market conditions ever seen. In Recent months the days of supply is moving toward a balance market.

Now is a good time to sell: November - January is the low point of the year for competing listings.

To read my complete report on the Huntington Beach Real Estate Market go to: www.HowsTheHBmarket.com

For an Instant Home Value Report for your home go to: www.HBneighborhoodNews.com

1814 Main St, “Park Area” Huntington Bch | Custom-Built Estate | Constructed in 2014 For 3D Tour & Details: www.1814Main.info Gu e s t H o u s e Ar r ang e me nt | C l o se t o sch ools | 6 B edrooms | 5 B at h s | 2 H alf B at hs 5 , 5 6 3 A sq ft | 7 ,6 2 5 SF Lot | 4 Car Garage | Spa/Ou t door Kit ch en

ON MARKET Call for Details & Showing Information | List Price $3,750,000 The quaint “Park Area” of Downtown Huntington Beach is “beach close” but more quiet with fewer tourists than the “resort areas”. This spacious custom built home, with guest house arrangement, offers the opportunity for all members of multi-generational households to participate in the Beach Lifestyle!

MODERN OCEANFRONT HOME ON SAND | Sweeping Ocean & Sunset Views!

For 3D Tour & Details: www.16351sPacific.info 40’ X 70’ Corner Lot | Built in 2021 | 6 ,300 ASqFt of L ivin g Area | 6 B edrooms | 6 B at hs 2 H a l f Ba ths | 3 C ar Gar age | Mu lt iple En t ert ain in g Areas | Elevato r

ON MARKET Call for Details & Showing Information | List Price $9,250,000 This Custom Built Contemporary Oceanfront Home was constructed on an oversize 40 foot corner lot in 2021.

The extra lot width allows the home to offer an enviable balance of contemporary appeal & comfort with high ceilings on all levels and walls of windows… this is truly a modern masterpiece sitting “on the sand”!

16871 Airport Cir #103 | Huntington Beach “Coastal Walk Community” Former “Model” Townhouse built in 2015 with $80,000+ in Builder Upgrades Development is a nice stroll to Shopping, Beach, Bolsa Chica Wetlands, & Harbour.

3 Bedrooms | Tech/Office Area | 2 Full Baths | 2 Half Baths | 1,963 Asqft | 2 Car Garage | “Move-in” ready Home that has been refreshed to make it look like new! www.16871Airport.com NEW LISTING | PRICED AT: $1,175,000

626 17th Street | Downtown Huntington Beach “Numbered Streets Area” Just updated & remodeled inside & out including new: Kitchen & baths, luxury vinyl wood floors, baseboards, paint, flat-panel TVs, double pane windows, electrical panel, car charger, LED lighting, AC/Furnace, exterior siding, and more!

3 Bedrooms | 2.5 Baths | 2,266 Asqft | 2 Car Garage 6 Blocks to Beach For 3D Tour, More Pictures, & Info: www.62617th.com REDUCED | NEW PRICE: $1,650,000 SELLER WILL CONSIDER INSTALLMENT SALE, TERMS: Minimum 35% Down | 3.95% Interest Rate years 1 thru 5 4.95% Interest Rate years 6 thru 10 | 5.95% Interest Rate years 11 thru 15 | 30-year Amortization No Prepayment Penalty | Balloon Payment Due in 15 years Subject to Buyer qualification per regulatory guidelines.

Orange County Seeing a “Slower Market” due to higher rates

As the Federal Reserve pushed harder on the economic brake pedal, the housing market has slowed significantly.

The Federal Funds Rate has increased 375 basis points since 3/17/2022.

By Scot Campbell 11/2/2022 – Source: FreddieMac & Reports on Housing

Active Listing Inventory in the past couple of weeks increased by 21 homes, up 1%, and now sits at 3,677. Last year, there were 1,864 homes on the market, 1,813 fewer homes, or 49% less.

Demand, the number of pending sales over the prior month, plunged by 157 pending sales in the past two weeks, down 11%, and now totals 1,270, its lowest reading since April 2020, the initial lockdowns of the pandemic. It is the lowest level for mid-October since 2007. Last year, there were 2,429 pending sales, 91% more than today. The 3-year average prior to COVID (2017 to 2019) was 2,180, or 72% more.

Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, increased from 77 to 87 days in the past couple of weeks, its highest level since mid-May 2020. It was 23 days last year, much stronger than today.

Mortgage Rates Surpass Seven Percent October 27, 2022 – Source: FreddieMac

The 30-year fixed-rate mortgage broke seven percent for the first time since April 2002, leading to greater stagnation in the housing market. As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence. Many potential homebuyers are choosing to wait and see where the housing market will end up…

Home Sellers get the “Very Best Imagery” package possible when they list with Scot Campbell: High Dynamic Range Still Photos, Dramatic Aerials, Lifelike Walk-Thru 3D Tour, and detailed 2D Floorplan!

When Scot Campbell put 17931 Wellbank Lane in Huntington Beach on the market, all the HDRi (high dynamic range intelligence) photography, Aerial images, Walk-Thru 3D tour, and the Detailed 2D Floorplan were published in the Realtor MLS the moment it became an “Active” listing.

Immediately, buyers & agents began viewing the imagery… and requesting appointments for in person showings. There were 159 “views” of the walk-through 3D tour in the 9 days the home was on the market, over 20 in person showings, and multiple offers. The property is now in escrow Full Price.

If you are having thoughts of selling and would like your home marketed with the same imagery package that helped sell 17931 Wellbank Lane, contact Scot Campbell!

To see listing with HDRi Photography, 3D Tour, & 2D Floorplan Visit: www.17931Wellbank.info

On Market: 1203 Delaware Street, “Downtown Huntington Beach”

Super-Size 3-Story Beach House | Open Floorplan with over 3,500 SqFt of living area | Recently updated & move-in ready Short stroll or bike ride to Pacific City, Beach, Parks, etc | 3 Bedroom + Bonus Rm & Sundeck | 3.5 Baths | 2 Car Garage Larger 27’ X 120’ lot | Loaded with luxury quality upgrades & finishes | 3D Tour/Details: www.1203Delaware.com

16385 Maruffa Circle “Humboldt Island”

4 BR | 3.5 BR | 2,900 Approx. SqFt | 5,000 SqFt Lot

3D Tour & Details GoTo: www.16385Maruffa.info

16462 Malden Cirlce, “Gilbert Island” Hunt. Harbour 5 BR + Office | 5 BA | 6,950 Asqft | 2 Main Channel Docks

3D Tour & Details: www.16462malden.com

SOLD FULL PRICE | Multiple Offers | $2,750,000

FOR LEASE | Multi Year Lease Avalible | $49,500 per Month

3954 Aladdin Drive, “Weatherly Bay” Hunt. Harbour

OCEANFRONT PIER COLONY PENTHOUSE

2 BR | 1.5 BA | 1,257 Asqft | 2 Car Garage

2 Bedrooms + Loft | 2.5 Baths | 1,500 SqFt | 2 Parking Spaces

CLOSED OVER ASKING | $910,000 | Multiple Offers

SOLD by SCOT | $2,120,000 Furnished | RECORD PRICE!

3D Tour & Details GoTo: www.3854Aladdin.info

3D Tour & Details GoTo: www.200PCH332.com

When Markets Shift, there are always people who benefit from the new conditions… Who are the “Winners” in today’s market?

Market Observations By Scot Campbell – Real Estate Broker

~ Source: Freddie Mac & Reports on Housing

BACKGROUND: Home Prices skyrocketed from July 2020 through February 2022. Buyers & many Sellers benefited from mortgage rates that dipped all the way down to 2.86% in September 2021… but then the mortgage market began to increase. The Federal Reserve raised the federal funds rate 300 basis points from 3/17/22 to 9/21/22, another 75 basis point increase expected on 11/2/22. These actions increased mortgage rates to 7.08% (10/27/22 FreddieMac).

Today, most homeowners have a very low mortgage rate on their existing home, thus are not motivated to move.

According to Steven Thomas (Reports on Housing): 89% of homeowners have a mortgage that is 5% or lower…71% have 4% or lower… and, 29% have 3% or lower. According to the California Association of Realtors ~ Housing Affordability Index, only 12% of prospective buyers could afford to buy the Median Priced home in June 1022 when mortgage rates were at 5.81%. Now that rates are above 7%, affordability has fallen further (assuming buyers elect to limit their financing choices to a Confirming 30 year fixed rate loan).

Given the shift in market conditions outlined above, there are two classes of property owners who could be considered “Winners” from these new conditions: LANDLORDS: Sometimes when you decide to move, it makes sense to keep your exiting home as a rental, especially if you qualify to buy without the sale of the old home. Many “would be” buyers for a home like yours, can no longer afford to purchase… so instead, they are going to rent. The economic principle of the substitution effect has kicked in strong. There are now many more prospective tenants for your property: Greater demand means higher rents and a more financially qualified pool of prospective tenants.

Important consideration if you rent out your former principle primary residence: The reduced capital gains rate (IRS section 121), $250,000 profit exemption per spouse, expires on the 3-year anniversary of the date you move out.

If you want to take advantage of IRS section 121, end the lease no later than 2.5 years after you move out, so you have a “comfortable” 6 months to get your old home sold (and enjoy $250,000 in capital gains per spouse tax free).

Landlord/Tenant laws/enforcement were affected by Covid-19, so selecting a highly qualified tenant is more important than ever before to insure reliability of rent payments. I offer leasing service with excellent tenant screening and the same high quality imagery package as my For Sale listings… Reach out if you would like more information.

HOMESELLERS WHO WANT RELIABLE INCOME AFTER THE CLOSE: For years, sellers of real estate have used Installment Sales (seller carry back financing) to reliably collect income after selling a property… they also did it to defer and minimize capital gains taxes. When rates were very low last year, buyers had no interest in seller carry financing (because most carry back sellers expect to be paid off in 5 or 10 years… buyers prefer not to have a balloon payment), and sellers certainly were not excited about a 2.86% interest rate. But now, with a qualified buyer, sizable down payment and/or Blanket Encumbrance, sellers who carry back financing can get an excellent after-tax return & reduce risk to a level well below other investments. Research shows approximately 42% of the potential move-up buyers are sitting with lots of equity and an existing mortgage between 3% & 4%... these are buyers who would pay top dollar for your property if they could get an interest rate close to what they have now. I am already seeing property owners benefiting from the Market Shift by doing Installment Sales. Once again, there is an abundance of qualified buyers with strong down payments and the ability to make reliable mortgage payments… And, this is exactly what some property sellers want because a standard sale with all profits realized in the year of sale could trigger a very large capital gains tax bill (as much as 38%, perhaps more if the property is highly appreciated).

Another consideration sellers like: By accepting interest only payments, the capital gains tax can be deferred until the principle is paid off… So, sellers collect interest (for years) on money that would have been paid to the IRS. If you would like to explore the benefits of doing an Installment Sale, I can answer your questions and compute the approximate income payments you will receive depending on the sale price, amortization, and interest rate. Please contact me, I am happy to speak to you on the phone or in person.

Important - This article is Not Intended to be specific advice: Receiving rent or installment payments tends to be more beneficial under the tax code when ordinary income is low (often when people are retired). Do NOT sell a highly appreciated property without advice from a CPA/Tax/Legal Expert who understands your complete situation. Advice and counsel of a Realtor and Qualified Mortgage Broker who are familiar with the IRS rules, lending regulations, & best practices are an absolute necessity prior to entering into a purchase contract involving an Installment Sale.

SCOT CAMPBELL / COLDWELL BANKER-Campbell Realtors Global Luxury Specialist 714.336.0394 Mobile / scot@campbellrealtors.com / www.scotcampbell.com / DRE #00943759

SAMPLE NEIGBORHOOD NEWS REPORT www.HBneighborhoodNews.com

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COLDWELL BANKER Campbell Realtors 1720 Pacific Coast Hwy, Suite 101 Huntington Beach, CA 92648

Local Postal Customers

714.336.0394 Mobile / scot@campbellrealtors.com / www.scotcampbell.com The property information herein is derived from various sources that may include, but not be limited to, county records and the Multiple Listing Service, and it may include approximations.

Although the information is believed to be accurate, it is not warranted and you should not rely upon it without personal verification. ©2022 Coldwell Banker. All Rights Reserved. Coldwell Banker and the Coldwell Banker logos are trademarks of Coldwell Banker Real Estate LLC. The Coldwell Banker® System is comprised of company owned offices which are owned by a subsidiary of Realogy Brokerage Group LLC and franchised offices which are independently owned and operated. The Coldwell Banker System fully supports the principles of the Fair Housing Act and the Equal Opportunity Act.