Real gridlock: Homebuyers eager, sellers scarce

• May 3, 2023

By Gregory Schmidt | The New York Times

The housing market typically comes to life in spring, when buyers emerge in the warmer weather. This year, the market appears stuck in a deep freeze, and the biggest culprit is a lack of sellers, housing experts say.

There is interest among buyers — mortgage applications were up 10% in March from the month before — but the number of homes for sale is low. The mismatch is caused in part by homeowners who are inclined to sell but are sitting on the sidelines, scared off by the steep prices and mortgage rates that they would face as buyers.

More than three-quarters of sellers said they felt “locked in” to their home by their own low mortgage rate, according to a recent survey by Realtor.com. More than half said they planned to wait until rates fell before putting their homes on the market.

Sandy Robinson, a 71-year-old retired teacher in Fairhaven, Massachusetts, is daunted by the market. She would like to sell her two-bedroom town house but is worried about being able to afford a new home. “It’s a little scary now, and you have to be careful,” she said.

A stalemate has mired the housing market when it should be more robust. Sales of existing homes in March were down 22% from the year before, according to the National Association of Realtors. The inventory of unsold homes on the market at the end of March totaled 2.6 months’ supply, meaning it would take that long to sell them. Inventory is typically twice that amount to balance supply and demand.

“We are in a real gridlock situation,” said Robert Frick, corporate economist at the Navy Federal Credit Union. “It’s going to be a tortuous process to unfreeze the market and take a long time to get back to a normal supply-and-demand situation.”

Fewer homes for sale mean more competition among buyers, which leads to bidding wars and drives up prices. Although down from recent highs, the average price of a house remains about 40% higher than at the beginning of 2020, according to the S&P CoreLogic Case-Shiller index, which measures prices across the nation.

“Everybody is a little surprised at the level of price resilience,” said Todd Teta, chief product and technology officer for Attom Data Solutions, a real estate analytics firm.

Matt Berger would like to sell his three-bedroom starter home in Lebanon, Ohio, where he lives with his wife and two young children, but is holding back. “It feels tight now and will only get tighter as the kids grow,” he said.

They are looking to move closer to Cincinnati, but homes they could afford a year ago are now out of their price range. Adding to the pressure is the low mortgage rate on their current home: “We are in the mid-threes” — roughly half the national average — “and I’d hate to have to say goodbye to that,” said Berger, 42.

“It’s a doubly whammy of the higher interest rates and the home values being so high, and that is scaring us off,” he added. He and his wife are hoping that mortgage rates will fall and they find a cheaper home in a year or two, before their children are settled in school.

The average rate on the most popular home loan, the 30-year fixed-rate mortgage, is 6.43%, Freddie Mac reported Thursday, more than twice what it was two years ago. Mortgage rates peaked above 7% late last year, but the decline since then has been slow and uneven.

To get sellers more motivated again, rates will have to fall to the “magic mortgage rate” of 5.5%, according to a survey by John Burns Research and Consulting. More than 70% of prospective homebuyers told the researchers that they were not willing to accept a mortgage above that rate.

“Homeowners seem to be pretty patient right now,” said Maegan Sherlock, a senior research analyst at John Burns. “Until things get a little better, those people are going to hold out,” she added.

Most industry experts believe the tipping point is still a ways off. “This is going to be a transition year,” said Danielle Hale, the chief economist of Realtor.com. “As we move into 2024, we should see more people with an appetite to buy.”

The market also may thaw as demand from frustrated buyers is met by homebuilders, which “historically created first-time home opportunities and move-up opportunities,” said Teta of Attom.

A lack of inventory of existing homes appears to be pushing buyers to newly built homes, a smaller market where sales have held up better. Sales of new single-family homes jumped nearly 10% in March from the month before, according to the Census Bureau.

The National Association of Realtors forecasts that sales of new homes will increase 4.5% this year and 12% in 2024. It expects existing-home sales to drop about 9% this year and then bounce back in 2024.

And there are always reasons that reluctant homeowners could be compelled to sell, like job relocations, downsizing or divorce, said Iliana Abella, executive director of sales at the Abella Group, a real estate brokerage in Miami.

“If you are planning to stay in your home for longer than five years, 6% is not going to kill you,” she said of current interest rates.

Still, many homeowners are content to wait.

Ellen Goldman, a 72-year-old retired lawyer in Naples, Florida, is looking to downsize. She and her husband, Sam Savage, have lived in their two-story home since 2004 but realize that the stairs will get more difficult as they age.

“We both work out, and it’s not an issue,” Goldman said, adding that “we want to make the move now before it becomes too hard.”

But they are in no rush. “We don’t have to do this,” she said as they keep an eye on local prices. “We would be fine staying, too.”

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Is worst of California banking crisis over?

• May 3, 2023

What started in March with the stunning collapse of Santa Clara-based Silicon Valley Bank continued Monday, as state regulators announced that they had seized San Francisco-based First Republic Bank, the second biggest bank failure in U.S. history.

Quickly, the Department of Financial Protection and Innovation said it appointed as receiver the Federal Deposit Insurance Corp., which brokered a sale of First Republic to JP Morgan Chase, the nation’s biggest bank.

Gov. Gavin Newson, in a statement: “In close partnership and coordination with the FDIC, California DFPI took decisive and critical action to stabilize the situation, avert layoffs, and protect Californians. The swift action by FDIC to secure a purchaser for the bank will protect depositors, including uninsured depositors.”

Despite the quick action and reassurances, inquiring minds may want to know:

Should we be worried about California-based banks being bought by out-of-state companies?
Is this the end of the immediate banking crisis, as JP Morgan CEO Jamie Dimon told analysts Monday?
Will California lawmakers do anything, or can they?

The answers to those questions seem to be: Maybe, maybe not — but a joint banking committee oversight hearing will be held on May 10, when state regulators will field queries about how these banks failed, whether new policies can be passed to prevent more failures and how state and federal laws can work together to protect consumers.

State Sen. Monique Limón, chairperson of the Senate committee on banking and financial institutions, told CalMatters that the public hearing was scheduled before First Republic Bank’s collapse, but now it’s “very, very timely” and the information they’ll learn “will apply to two banks and not just one.”

The Democrat from Santa Barbara said Monday that she hopes we’ve reached “the bulk” of this crisis, but “it’s a little premature to say what may come out in terms of legislation.”

Limón: “More than anything we want well-managed banks operating in California communities, period.”

But she also noted that if lawmakers want to pass new banking regulations, they may be preempted by the federal government. President Biden called Monday for more federal regulations over large and regional banks “to make sure that we’re not back in this position again.”

Everyone wants to avoid a repeat of the 2008-09 financial crisis, when several global financial institutions and investment banks failed, causing a recession and crashing economies around the world. Afterwards, Congress put in more guardrails for the banking industry, but in 2018 and 2019, rules were relaxed for regional banks with less than $250 billion in assets — including Silicon Valley Bank and First Republic.

On Friday, the Federal Reserve issued a report blaming those lessened regulations, bad management and its own lack of oversight for Silicon Valley Bank’s failure in early March. That spooked customers and investors at First Republic, which lost $100 billion in deposits since and saw its stock lose 97% of its value. Both California banks catered to wealthy clients whose accounts had more than the $250,000 protected by federal insurance.

The FDIC said that 84 of First Republic Bank’s offices, located in eight states, will reopen as JP Morgan Chase branches. First Citizens Bank, headquartered in Raleigh, N.C., bought the remaining assets of Silicon Valley Bank, doubling its size.Still, it’s the dollar amount that is likely to be the most contentious recommendation. Up to this point, the task force sought to downplay the number. One member, Cheryl Grills, told Wendy in April that the figure is “the least important piece” of its study, and that the news media’s “preoccupation” with it is “unfortunate.”

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Next housing crackdown? More homeless shelters

• May 3, 2023

All over California, cities are falling far short when it comes to providing enough shelter for their homeless communities.

More than 69,000 homeless residents live in Los Angeles County, for instance, but that county has just over 21,000 beds in shelters and temporary housing programs.

It’s a similar story in Sacramento County, which counted nearly 9,300 unhoused residents in its last census, but has just over 3,000 shelter and temporary housing beds.

SEE MORE: New California housing lawsuits face major obstacles, attorney says

Those massive gaps – which ensure thousands of people remain homeless – are visible in cities throughout California. But despite constant reassurances from Gov. Gavin Newsom and lawmakers that getting people off the street is a top priority, there’s no state requirement for cities and counties to make sure they have enough shelters or housing for homeless residents.

A bill working its way through the Legislature could change that, and potentially lead to sanctions against local governments that fail to plan for the needs of homeless Californians.

Senate Bill 7 would — for the first time — require cities and counties to plan enough beds for everyone living without a place to call home. It would go beyond just temporary shelter, also including permanent housing placements.

Its author, Sen. Catherine Blakespear, a Democrat from Encinitas, called it a “transformational idea” that could help move the needle on homelessness where other attempts have failed.

“Everything we’re doing currently, it will result in homelessness growing,” Blakespear said in an interview. “It will not result in homelessness going down.”

Housing goals

Currently, the state makes sure every city and county plan for new housing through a process known as the regional housing needs allocation. In all, the state requires cities and counties to plan for 2.5 million new homes over the next eight years — about 25% of which must be affordable for very low-income occupants.

RELATED STORY: Most cities still falling behind affordable housing mandate, state numbers show

But this method doesn’t require cities and counties to plan any housing that is specifically for homeless residents.

If the bill passes, local officials would have to include homeless housing in their plans. How much is yet to be determined, but it would be based on each city’s point-in-time census count of its homeless population. Ideally, Blakespear said, the plans would require a unit for every single person counted.

The idea comes at a time when the state is forcing local governments to take more responsibility for providing housing.

Newsom’s administration sued the Orange County coastal enclave of Huntington Beach earlier this year for failing to adopt a housing plan. And cities that flout state housing law also are subject to the “builder’s remedy,” which allows developers to bypass local zoning laws for certain projects.

Blakespear’s bill has gained some early support from housing activists, and recently passed out of the Senate Governance and Finance Committee by a 6-2 vote. While some local leaders are sure to chafe under yet another state-imposed housing requirement, several big-city mayors are tentatively supportive.he final details in the bill matter,” Sacramento Mayor Darrell Steinberg said in an emailed statement, “but any bill that moves the state and cities closer to making housing and services for the homeless a mandatory obligation for government is a step in the right direction.”

Los Angeles County has 21,100 placements in its temporary housing, safe parking and motel programs, according to a county dashboard — not enough to accommodate even a third of its unhoused population.

More money for homeless housing

At a recent hearing, some bill critics wondered where the money would come from to build all this extra housing.

“The funding’s going to be incredibly critical,” said Jason Rhine, assistant director of legislative affairs for the League of California Cities. “If we do not have the money, we will not be able to house individuals.”

The league hasn’t officially opposed the bill, but says it has concerns.

Blakespear wants to pair her bill with a new state fund, which would help cities, counties and nonprofits build housing for people who are homeless or at risk of losing their homes. But it remains to be seen how much — if any — money the Legislature allocates, as the state faces a budget deficit of at least $22.5 billion this year.

Some aspects of the legislation are still up for negotiation. It’s unclear what type of homeless housing cities and counties could use to fulfill the new requirements. Blakespear envisions it would include both permanent and temporary — meaning apartments, but also shelters, RV sites, single-room-occupancy hotels, and more.

It’s also unclear exactly what each city and county would be on the hook for under the new bill, and what the penalties would be for noncompliance. The state’s current process requires cities to plan for housing, including zoning for it and removing roadblocks from its construction, but doesn’t require them to get it built.

Much of the housing cities plan for during that state-mandated process never gets constructed. And low-income housing fares the worst. In the last eight-year planning cycle, just 20% of the very-low-income units needed statewide were permitted.

The California Building Industry Association opposes Blakespear’s bill, worrying money to fund it would come from raising taxes and fees paid by homebuilders. Furthermore, existing law already requires cities and counties to assess their need for emergency shelter, said Cornelious Burke, the association’s vice president of legislative affairs.

Blakespear said she has no intention of using construction fees to cover the cost of her bill. And she disagreed the state’s existing shelter-assessment requirement renders her bill unnecessary.

“Those are just words,” she said. “That is not an actual obligation to provide anything for people who are unhoused.”

Ray Bramson of Destination: Home, a nonprofit that helps spearhead the homelessness response in Santa Clara County, said the bill could help get more homeless housing built. But it depends on how the details of the bill shake out, he said. For one thing, the bill should focus on permanent housing that comes with supportive services like mental health care – not on temporary shelter, Bramson said.

And, the bill must come with funding.

“If not,” he said, “then it’s just another goal that we’re going to struggle to meet collectively.”

​ Orange County Register 

Cool, wet days ahead for Southern California with a short-lived storm on the way

• May 3, 2023

Cooler temperatures have already arrived over Southern California with some light drizzle already touching down earlier this week, and a chance for more rain is on the way with some showers expected to fall as early as Tuesday evening.

A low pressure system was making its way across the region this week, with Los Angeles County looking to be the first stop on its path, according to National Weather Service meteorologist Lisa Phillips.

“We already have some showers moving in to the northern parts of (Southern California),” Phillips said. “And when the low pressure system gets here, it’s just kind of going to sit over us for awhile.”

The bulk of the rain is expected to arrive Wednesday afternoon into Thursday, but some overnight showers on Tuesday were possible.

In the mountains and foothills of Los Angeles County, temperatures will stick to the low 60s for most of the week with about an inch of rain expected to drop over the area.

Along the coastal communities in Los Angeles and Orange counties, temperatures will be much of the same, sticking to the low 60s with a little under half an  inch of rain expected to fall.

Heading more inland in Orange County in cities like Fullerton and Anaheim, about a third to a half an inch of rain is expected to drop, said NWS meteorologist Stefanie Sullivan.

In San Bernardino County, cities including Fontana and Ontario will see about a quarter to a third of an inch of rain, with temperatures dipping into the low 60s and high 50s by Thursday before climbing back into the mid 60s by Friday.

Heading up to the San Bernardino Mountains, the system will also bring the chance of more snow, though nothing like the rare blizzard that blanketed the area earlier this year. The system is expected to arrive Wednesday evening and into Thursday, bringing about an inch to two inches of snow over communities like Big Bear and Lake Arrowhead, with a quarter to half an inch of rain falling lower down the mountains, Sullivan said.

“There is a small chance of some thunderstorms over the mountains,” Sullivan said.

Riverside County will see precipitation similar to San Bernardino with about a quarter of an inch of rain and temperatures in the low to mid 60s in cities including Moreno Valley and Murrieta.

The system will be on the move again by Friday, though there will still be a chance for some lingering showers.

After the rain is gone, the region will warm a little but will likely remain in the low to mid 60s, Phillips said.

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Angels reliever José Quijada has ligament damage, will get second opinion

• May 3, 2023

ST. LOUIS — Jose Quijada got a discouraging diagnosis on his sore elbow, leading the Angels to concern that the left-hander might be lost for the season.

Manager Phil Nevin said the first evaluation showed “some damage to the ligament,” and that Quijada will get a second opinion to determine if he needs surgery. A damaged ligament would normally lead to Tommy John surgery, which has a 12- to 18-month rehabilitation.

“The news wasn’t great from the MRI but sometimes those can be misleading,” Nevin said. “Then you can go into further evaluations and hopefully we get better news.”

Quijada briefly emerged as one of the Angels’ ninth-inning options in April, but he struggled for a couple of outings, including one last week in which he threw an 89 mph fastball. His average is 94-95 mph.

The next day, Quijada reported that he didn’t feel right when he woke up in Milwaukee, so he was placed on the injured list and sent for further evaluation.

The Angels are also now planning to be without right-hander Austin Warren for an extended period. Nevin said they don’t yet have an official diagnosis on Warren, but he is not going to throw for four to six weeks.

“Hopefully we get better news on both of them,” Nevin said.

TEPERA ACTIVATED

The Angels activated right-hander Ryan Tepera after he missed two weeks with shoulder inflammation.

Tepera, who threw two perfect innings at Class-A Inland Empire during a rehab assignment, said he used the time off to work on his mechanics. He watched videos from how he pitched two years ago, trying to correct the issues that led to him struggling for the first couple of weeks of this season before he was hurt.

“The main thing I struggled with the first part of the season was really getting on the plate, keeping everything on the plate, especially the slider,” Tepera said. “That’s one thing I really looked into and focused on mechanically. I made some adjustments and I feel really good.”

The Angels created a spot for Tepera by optioning right-hander Andrew Wantz, who has an 0.79 ERA. The Angels had only two relievers with options – Wantz and Chase Silseth – and they chose to send down Wantz rather than designating a veteran pitcher for assignment.

General Manager Perry Minasian said the Angels can’t afford to lose any more bodies, particularly after the losses of Quijada and Warren.

“It’s a long season,” Minasian said. “We want to keep as many players as we can over the course of the year. We make tough decisions. That’s the decision we made.”

Nevin also pointed out that Wantz did have some things he needed to work on, such as his fastball command. Wantz’s ERA is also somewhat misleading because he’s allowed nine of 12 inherited runners to score.

SILSETH’S ROLE

The Angels not only opted to keep Silseth, who could have been optioned, but Nevin said he’s planning on increasing his role in the bullpen.

Silseth had only been a starter, but he has pitched three scoreless innings out of the bullpen so far, including working the seventh inning with a three-run lead on Sunday.

Nevin believes that Silseth’s velocity might go up from his current 96.3 mph average with regular use in short stints. That would be particularly helpful for the Angels because their bullpen is mostly finesse pitchers.

“The other day you saw him pitch in the seventh, and I could see him climbing even higher than that,” Nevin said. “He’s certainly going to pitch in some high-leverage situations. I want to see it. I think he’s very capable of it stuff-wise and mentally.”

NOTES

Shohei Ohtani got the day off on Tuesday, just the second time this season that he’s been out of the lineup. Nevin said it was a logical day because he got a two-for-one, including Monday’s off day, and he’s pitching on Wednesday. The Angels were also facing a lefty, so they could get an extra right-handed hitter in the lineup. …

Switch-hitter Luis Rengifo, who is much better against lefties, got the start in center field, with Mike Trout going to DH. Nevin said he is comfortable with Rengifo in center as opposed to moving Taylor Ward to center and putting Rengifo in left. “We like the way he moves out there,” Nevin said. …

Minasian said there is still no timetable for when first baseman Jared Walsh (headaches, insomnia) or catcher Max Stassi (hip) will return.

UP NEXT

Angels (RHP Shohei Ohtani, 4-0, 1.85) vs. Cardinals (RHP Miles Mikolas, 1-1, 5.97), Wednesday, 4:45 p.m., Bally Sports West, 830 AM

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Video: Fryer and Albano discuss the big surprises in CIF-SS baseball, softball playoff pairings

• May 2, 2023

OCVarsity’s Steve Fryer and Dan Albano react to the CIF-SS pairings in baseball and softball in this week’s O.C. Dugout Show, starting with Foothill getting the at-large bid over Servite in Division 1 baseball.

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How does an attorney represent a guilty client? Ask the lawyer

• May 2, 2023

Q: My brother has been charged with a crime. He has a criminal defense lawyer, though, who says he is “fighting hard to prove his innocence.” Our question is: If the lawyer knows the client is guilty, then what?

F.B., Athens

Ron Sokol

A: The lawyer has an obligation to competently and zealously represent the client, within the bounds of the law; this includes ethical rules. The lawyer, for example, is not to elicit or promote testimony or evidence that they know is false. The lawyer is also not to encourage or participate in a fraud on the court. Thus, the situation you provide is sensitive and requires careful evaluation.

One factor to keep in mind is that criminal defense lawyers are not obligated to prove that their clients are innocent. They can present a defense that seeks to show there is insufficient evidence to convict beyond a reasonable doubt.

If an individual comes to a defense lawyer and proclaims innocence, the lawyer may or may not believe the client; in fact, perhaps the person is not being candid and is, in fact, guilty. The lawyer is still permitted to do their job. This may mean seeking a less harsh sentence, focusing on a lesser crime and/or seeking an outcome that challenges the client’s alleged guilt.

Q: If I am accused of a crime, am I required to tell the lawyer that I did it?

C.S., Seal Beach

A: This question is also challenging to answer. It could take a treatise to address all aspects of what clients should disclose to their lawyers.  Certainly, as a matter of common sense, you do not want your lawyer to be caught by surprise because you concealed information or were misleading.

One option is to ask your lawyer just what they want to know and to what degree the lawyer expects or prefers that you be candid. Some lawyers do not want to know all the details. The expression “don’t ask, don’t tell” comes to mind.

Also, to state it again, the burden in a criminal case is on the prosecution. The defendant’s guilt has to be proven beyond a reasonable doubt. Further, the jury has to be unanimous. You can win the case with a finding of “not guilty,” even though that does not necessarily mean you are innocent.

As such, consider talking with your lawyer about what they want to know, how much they want to know and what does they expect to do with the case.  This is very likely not a one-and-done discussion; it may be a discussion that occurs a number of times over the course of the proceedings.

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From my vantage point, as a lawyer, I would not encourage a client to provide me with false or fabricated information. The client does not want the lawyer caught off guard by information that comes into play, be it records, testimony or basic analysis, but which the client already knew existed. The lawyer is fighting vigorously to try to protect you.

Ron Sokol has been a practicing attorney for more than 40 years, and has also served many times as a judge pro tem, mediator, and arbitrator.  It is important to keep in mind that this column presents a summary of the law, and is not to be treated or considered legal advice, let alone a substitute for actual consultation with a qualified professional. 

​ Orange County Register 

2 hospitalized after minivan slams into Santa Ana apartment complex

• May 2, 2023

Two people were hospitalized after a minivan crashed into an apartment building in Santa Ana Monday night, May 1, authorities said.

The driver ran off after the crash and was being sought, Santa Ana police Sgt. Maria Lopez said.

Orange County firefighters went to the 1600 block of West Memory Lane, near The City Drive, and found the minivan in a ground-floor apartment and had been told that there may have been victims trapped inside, Capt. Sean Doran told OnSceneTV, a news outlet that often partners with the Southern California News Group.

It appears the entire minivan ended up inside the building.

Firefighters moved the minivan enough to free a woman who had been trapped under the minivan, Lopez said. Paramedics took her to the hospital in critical condition.

Firefighters later found a man inside the apartment, Doran said. He was treated and taken to a hospital in unknown condition.

Lamar Moorer told OnSceneTV he was standing in the parking lot of the apartment complex and saw the minivan “going fast through (the intersection)” before running into the building.

“No brakes or anything,” he said. “It just kept going.”

Moorer, whose mother lives in the complex, said he ran to the apartment following the collision and tried to help the injured woman, but was unable to move the minivan and had to wait for firefighters to arrive.

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