Hello Jefferson Park community and Real Estate enthusiasts! Nathan Derry here, your trusted Realtor, bringing you the latest market insights for May 2024. Let's dive into the numbers and discuss some key developments that could impact investors in our vibrant neighborhood.

Absorption Rate and Market Activity

The Real Estate market in Jefferson Park, 90018, continues to show robust activity. For the month of May 2024, we observed an absorption rate of 37%. Out of the 27 active listings, 10 properties were sold, indicating a healthy demand for homes in our area. The average sales price was $1,040,000, with homes spending an average of 41 days on the market (DOM).

Understanding the Absorption Rate

The absorption rate is a crucial metric that helps us gauge the market's health. A 37% absorption rate signifies a balanced market where the number of buyers is relatively equal to the number of available properties. This is a positive indicator for both buyers and sellers, suggesting a stable environment for transactions.

The Impact of California's New Law AB12

One of the significant legislative changes affecting the real estate landscape is California's AB12. This new law, which focuses on capping security deposits for residential properties, has far-reaching implications for both tenants and landlords. Here’s a breakdown of what AB12 entails and how it could affect investors:

1. Security Deposit Cap:

   • AB12 limits the amount landlords can charge for security deposits to one month's rent. This is a reduction from the previous practice where deposits could be as much as two to three months' rent. For investors, this means a lower upfront financial cushion to cover potential damages or unpaid rent.

2. Advance Payments:

   • The law permits an advance payment of at least six months’ rent if the lease term is six months or longer. This provision could appeal to landlords looking for financial security, but it also necessitates careful tenant screening to ensure long-term commitment.

3. Tenant Rights and Inspections:

   • AB12 requires landlords to offer tenants an initial inspection before the end of the lease. This allows tenants to address any deficiencies to avoid deductions from their security deposit. For landlords, this means more transparency and potentially fewer disputes over deposit returns.

Potential Implications for Investors

• Cash Flow Management: With the cap on security deposits, investors may need to adjust their financial planning and cash flow management strategies. Ensuring tenants are well-screened and maintaining a robust lease agreement becomes even more critical.

• Property Maintenance: The requirement for initial inspections could lead to better-maintained properties, as tenants will have the opportunity to fix issues before moving out. This can result in lower long-term maintenance costs for landlords.

• Market Appeal: The law aims to make renting more accessible by reducing upfront costs for tenants. This could potentially expand the pool of prospective renters, benefiting landlords with higher occupancy rates.

By staying informed about market trends and legislative changes, homeowners and investors can make strategic decisions to navigate the ever-evolving real estate landscape. If you have any questions or need further assistance, feel free to contact me at 424-303-0440.

All the best,

Nathan Derry, JohnHart Real Estate

📍JohnHart Real Estate

📞(424) 303-0440

📧 nathan@jhagents.com

👨🏽‍💻 itsnathanderry.com

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