Real Estate newsletter: Will soaring mortage rates sink home prices?

Welcome back to the real estate newsletter. By the time I finish writing this sentence, mortgage rates will likely have gone up. By the time you’re reading this, they’ll probably have gone up even more.

The pandemic has been a boon for homebuyers as mortgage rates hit historic lows, giving thousands of Angelenos access to a market they had previously priced out. But those times seem to be over.

Just a few months ago, interest rates for 30-year fixed-rate mortgages were below 3%. This spring they rose to 4%. Last week they hit 5% for the first time in a decade, leading many to wonder if the surge will cool LA’s scorching hot market. We asked some experts about the future of Southern California home prices.

On the celebrity side, two California soccer coaches made headlines this week — one as a buyer and one as a seller. The buyer is Sean McVay, who just lost $14 million on a farmhouse in Hidden Hills after winning a Super Bowl. He joins several current and former Rams stars in the area including Jalen Ramsey, Robert Woods and Matthew Stafford, who owns three homes in the celebrity-filled community.

The seller was Jim Harbaugh, the former 49ers coach who also took his team to the Super Bowl but couldn’t quite seal the deal. However, he had a smooth time unloading his Bay Area mansion, walking past the Atherton mansion for $11.78 million — nearly double what he paid for it in 2012.

I’m sure you’ve read a lot about the bidding war plaguing LA’s real estate market, but whenever columnist Steve Lopez chimes in, it’s worth revisiting the topic. He looked at a house that was listed for $1.2 million and sold for $2.5 million while casually reflecting on how ridiculous our market has become.

The third week of the month also brought a new episode of Gimme Shelter, the Times housing crisis podcast. It’s fun and addresses the age-old philosophical question of whether we should convert LA County’s 2,300 acres of golf courses into affordable housing. Listen to it.

While staying up to date, visit and like our Facebook page for property stories and updates throughout the week.

Mortgage rates are rising. Will it help?

Mortgage rate signing.

For a decade, low mortgage rates helped homebuyers steadily drive up housing costs. Now things are changing.

(Thitiphat – stock.adobe.com)

For a decade, low mortgage rates helped homebuyers steadily drive up housing costs. That includes the last few years during the pandemic, when interest rates fell to unprecedented levels and home prices skyrocketed across Southern California and the nation, writes Andrew Khouri.

Now things are changing.

Mortgage rates are rising fast, hitting 5% last week for the first time since 2011, a widely followed metric from Freddie Mac shows. Just six weeks ago, the average interest rate for a 30-year fixed-rate mortgage was below 4%. In November they were below 3%.

The rapid rise, in addition to rising prices, has suddenly made home ownership more expensive. If people can afford less, will house prices fall?

Rams coach gets new home game

In typical farmhouse style, the 9,000-square-foot mansion blends open spaces with luxurious materials like iron and oak.

In typical farmhouse style, the 9,000-square-foot mansion blends open spaces with luxurious materials like iron and oak.

(Jae Omar Design)

Fresh from their Super Bowl win, Rams players are spending springtime moving off the field. Days after Aaron Donald listed his Calabasas mansion and Matthew Stafford bought part of Drake’s party facility, head coach Sean McVay has bought a modern farmhouse in Hidden Hills for $14 million.

It’s a logical landing spot for McVay, as the gated, star-studded city is a short drive from the team’s training facility in Thousand Oaks. He joins several current and former Rams stars in the area including Jalen Ramsey, Robert Woods and Matthew Stafford – who owns three houses in Hidden Hills.

McVay has owned a 4,600-square-foot space in Encino since 2017, and his new space is nearly twice the size at 9,000 square feet. Set on 3 acres, the two story home is clad in glass and white oak.

Former Niners coach sells Bay Area mansion

The 1.3 acre property includes a main house and a guest house, totaling more than 8,500 square feet.

The 1.3 acre property includes a main house and a guest house, totaling more than 8,500 square feet.

(Zachary Kinovsky)

Jim Harbaugh hasn’t coached the 49ers since 2014, but he’s still closing deals in the Bay Area. Records show he just sold his home in the affluent enclave of Atherton for $11.78 million.

Harbaugh, who played soccer at nearby Palo Alto High School in the 1980s, almost doubled his money on the property. He paid $6.3 million in 2012 after the first of his four seasons as the 49ers head coach before joining the Michigan Wolverines in 2014. As of last year, he bought the home for $13 million.

The gated estate is spread over 3 acres in Atherton, a city consistently rated as one of the most expensive areas in the country and home to tech moguls and athletes like Stephen Curry and Jerry Rice. It features a main house and a guest house, which together offer five bedrooms and eight bathrooms in an area of ​​8,500 square feet.

Listed for $1.2 million. Sold for double.

A for sale sign begins with bidding on a house in this Breen cartoon

A home sold for $2.5 million — all in cash — after being listed for $1.2 million in South Pasadena.

The three-bedroom, one-bath home cost $1.2 million, writes columnist Steve Lopez.

It sold for $2.5 million in a week.

This is a deal that highlights the madness of the Southern California housing market, where legions of people are being deprived of the price of their homes while those with boatloads of hard cash fight it out in epic bidding wars. (Check out The Times Great SoCal House Hunt.)

It’s a case of capitalism’s rampage, writes Lopez, and speaks to a culture that’s ever-growing the distance between the haves and have-nots.

What to do at golf courses?

A golfer shoots as a gallery of uninterested Canada geese forages near the Balboa Golf Course in Van Nuys

VAN NUYS, CA – FEBRUARY 6: A golfer takes a shot as a gallery of Canada Geese feeds nearby at Balboa Golf Course.

(Myung J. Chun/Los Angeles Times)

Approximately 2,300 acres of land in Los Angeles County are designated for publicly owned golf courses. With so much room for golf and such a great need for affordable housing in LA, lawmakers are asking whether some of those golf courses should be converted into apartments, writes Liam Dillon.

On the latest episode of Gimme Shelter: The California Housing Crisis Podcast, Dillon chats about the value of public golf courses in cities versus housing and engages in a broader discussion of the impact that small but passionate supporters of a sport, hobby or neighborhood can have are interested in where homes are being built.

His guest is Assemblyman Cristina Garcia (D-Bell Gardens), the author of a new bill, AB 1910, that would provide federal funds for the conversion of golf courses into housing.

what we read

In March, US home sales fell to their lowest level in almost two years, but the median price rose to an all-time high: $375,300. That number may seem paltry to Angelenos, however, given that the Southern California home averages $735,000. Reuters has the story.

As California’s youth flock to the desert for the second weekend of Coachella, Insider spoke to a man who made $12,000 in eight days renting out his four-bedroom home in Indio. He said it helps him pay off his mortgage for a full year.

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