Hello everyone, Nathan Derry here, your trusted Realtor. Today, I want to share some insights on the real estate market in Beverly Grove, 90048, for the month of May 2024. This analysis is crucial for both potential buyers and investors to understand the current trends and legislative changes that could impact your investment decisions.

Market Overview

In May 2024, Beverly Grove witnessed an absorption rate of 21%, indicating a moderately paced market. Here are some key statistics:

• Active Listings: 52
• Sold Listings: 11
• Average Sales Price: $3,000,000
• Days on Market (DOM): 26

What is Absorption Rate?

The absorption rate is a metric used to evaluate the rate at which available homes are sold in a specific market during a given time period. An absorption rate of 21% means that roughly one in five homes listed for sale were sold in May 2024.

New California Law AB12 and Its Impact on Investors

California's Assembly Bill 12 (AB12) introduces significant changes to the rental market, particularly concerning security deposits. Here’s a breakdown of what AB12 entails and how it might affect investors:

• Security Deposit Cap: AB12 limits the amount landlords can demand as a security deposit to one month’s rent for unfurnished properties and two months' rent for furnished properties. This is a notable reduction from previous practices where landlords could demand higher deposits.
• Advanced Rent Payments: The law allows for an advance payment of at least six months’ rent if the lease term is six months or longer. This can be mutually agreed upon by the landlord and tenant.
• Return of Deposits: Landlords are required to return the security deposit within 21 days after the tenant vacates the property. An itemized statement of deductions must be provided if any portion of the deposit is retained.

Potential Implications for Investors

1. Cash Flow Management: The cap on security deposits means that landlords might need to reassess their cash flow management strategies, especially for properties requiring significant maintenance or repairs.

2. Tenant Screening: With reduced upfront costs for tenants, the pool of prospective renters might expand, necessitating more thorough tenant screening processes to mitigate risks associated with property damage and unpaid rent.

3. Market Competitiveness: Investors might find it more challenging to secure higher security deposits, making the market more competitive. Offering well-maintained properties and flexible lease terms could become essential strategies.

Tips for Investors

• Enhanced Tenant Screening: Implement rigorous screening procedures to ensure reliable tenants.
• Property Maintenance: Regular maintenance and inspections can prevent costly repairs and protect your investment.
• Legal Compliance: Stay updated on local and state laws to ensure compliance and avoid legal pitfalls.

Understanding the current market dynamics and legislative changes is crucial for making informed investment decisions. Beverly Grove continues to be a desirable location with a healthy real estate market. However, investors must navigate the implications of AB12 carefully to maximize their returns.

If you have any questions or need further insights into the Beverly Grove market or AB12, feel free to reach out. I’m here to help you make the best real estate decisions.

All the best,

Nathan Derry

📍JohnHart Real Estate

📞(424) 303-0440

📧 nathan@jhagents.com

👨🏽‍💻 itsnathanderry.com

Interested in seeing a property or one of my off market properties in person? Contact me today!  Who you hire matters!!!

Ready to make the best move of your life… let’s chat today!