Hello everyone, Nathan Derry here, your go-to Realtor for all things Los Angeles real estate. Today, I want to provide a detailed market analysis for Pico / Robertson, ZIP code 90035, for the month of May 2024. Additionally, we'll discuss the implications of the new California law, AB12, and how it could affect real estate investors.

May 2024 Market Snapshot for Pico / Robertson, 90035

For May 2024, the Pico / Robertson area exhibited an absorption rate of 28%. Here's a closer look at the key statistics:

• Active Listings: 25
• Homes Sold: 7
• Average Sales Price: $2,085,000
• Days on Market (DOM): 13

The absorption rate, calculated by dividing the number of homes sold by the number of active listings, indicates how quickly homes are selling in the area. An absorption rate of 28% suggests a moderately balanced market, with a slight tilt towards buyers.

Understanding AB12 and Its Impact on Investors

California's Assembly Bill 12 (AB12) introduces significant changes to the rental market, particularly affecting how security deposits are handled. Here’s a breakdown of AB12 and its potential implications for investors:

Key Provisions of AB12

1. Security Deposit Cap: The law caps security deposits at one month’s rent for unfurnished properties and two months’ rent for furnished properties.
2. Advance Rent Limitations: Restricts the amount of advance rent that landlords can collect, impacting the initial cash flow.
3. Tenant Protections: Enhanced requirements for returning security deposits and providing itemized deductions to tenants.

Implications for Investors

• Cash Flow Management: Investors may need to adjust their financial strategies due to lower upfront cash inflows from security deposits.
• Maintenance and Repair Costs: With lower security deposits, covering extensive repair and maintenance costs between tenancies could become more challenging.
• Tenant Attraction: Lower deposit requirements might attract a larger pool of potential tenants, potentially reducing vacancy rates and ensuring steadier rental income.

Tips for Investors in the Current Market

Given the current market dynamics and legislative changes, here are some strategic tips for investors:

1. Financial Planning: Reevaluate your financial plans to account for the lower security deposit inflows. Consider setting aside additional funds to cover potential maintenance and repair costs.
2. Tenant Screening: With the new deposit caps, thorough tenant screening becomes even more crucial to minimize the risk of damages and unpaid rent.
3. Lease Agreements: Clearly outline the expectations and responsibilities regarding property maintenance in the lease agreements to avoid disputes.

Preparing Your Home for the Market

If you're planning to sell your home in Pico / Robertson, here are some tips to make it stand out:

1. Enhance Curb Appeal: Ensure the exterior of your home is well-maintained and inviting. Simple landscaping improvements can make a big difference.
2. Professional Staging: Staged homes often sell faster and at higher prices. Consider hiring a professional to highlight your home's best features.
3. Address Repairs: Fix any noticeable issues and consider minor upgrades like fresh paint or new fixtures to increase your home's appeal.

Navigating the real estate market in Pico / Robertson requires a deep understanding of local trends and the latest legislative changes. With an absorption rate of 28% and the introduction of AB12, both investors and homeowners need to stay informed to make strategic decisions.

If you have any questions about how AB12 might impact your investment strategy or are considering buying or selling a home in Pico / Robertson, feel free to reach out. I’m here to help you navigate the market with confidence.

All the best,

Nathan Derry
Realtor, JohnHart Real Estate

📍JohnHart Real Estate

📞(424) 303-0440

📧 nathan@jhagents.com

👨🏽‍💻 itsnathanderry.com

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