Hello everyone, I'm Nathan Derry, your trusted Realtor with JohnHart Real Estate. Today, let's explore the latest real estate trends for Mid City, 90019, and discuss the implications of the new California law AB12 for investors.

June 2024 Market Overview

For the month of June 2024, Mid City, 90019, had an absorption rate of 32%, indicating a moderately active market with a healthy demand for homes.

Market Stats:

• Active Listings: 40
• Sold Listings: 8
• Average Sales Price: $1,905,000
• Average Days on Market (DOM): 17

The absorption rate is a crucial indicator of market health. A rate of 32% suggests that Mid City is experiencing a balanced market, where the number of buyers and sellers are relatively equal, leading to stable property prices and consistent sales.

Understanding the Absorption Rate

The absorption rate is calculated by dividing the number of homes sold in a month by the number of active listings at the end of the month. It helps gauge the pace at which homes are selling. A rate above 20% generally signifies a seller's market, while a rate below 15% indicates a buyer's market. The 32% absorption rate in Mid City suggests a balanced market with steady demand and supply.

Impact of New California Law AB12

On July 1, 2024, California's new law AB12 came into effect, introducing significant changes that could affect real estate investors.

What is AB12?

AB12 is a comprehensive housing reform law aimed at increasing transparency in real estate transactions and protecting tenants' rights. Key provisions include:

• Enhanced Disclosure Requirements: Sellers must provide more detailed property disclosures, including past repair history and potential environmental hazards.
• Stricter Rent Control Measures: Limits on rent increases for certain properties to protect tenants from excessive hikes.
• Incentives for Affordable Housing: Tax breaks and incentives for developers who build or convert properties into affordable housing units.

Implications for Investors:

1. Increased Compliance Costs: Investors may face higher costs due to the enhanced disclosure requirements. It's crucial to ensure all necessary documents and inspections are completed to avoid penalties.

2. Rent Control: For investors in rental properties, the stricter rent control measures could impact rental income. It's essential to evaluate the long-term profitability of rental investments under the new regulations.

3. Opportunities in Affordable Housing: AB12 offers incentives for developing affordable housing. Investors willing to explore this sector can benefit from tax breaks and other incentives, making it a potentially lucrative avenue.

4. Market Stability: The law aims to create a more stable and transparent real estate market, which could attract more buyers and investors in the long run.

The real estate market in Mid City is showing signs of balanced activity with an absorption rate of 32%. The new California law AB12 brings both challenges and opportunities for investors. By understanding the market dynamics and adapting to the new regulations, investors can make informed decisions and capitalize on emerging trends.

As always, if you have any questions or need further assistance with your real estate needs, feel free to reach out. I'm here to help you navigate the market and achieve your real estate goals.

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All the best,

Nathan Derry, JohnHart Real Estate

📍JohnHart Real Estate

📞(424) 303-0440

📧 nathan@jhagents.com

👨🏽‍💻 itsnathanderry.com

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