Housing opportunities abound but challenges remain

WASHINGTON – May 22, 2013 – The shape of housing markets has changed dramatically over time, and it will change again in the face of new housing opportunities and challenges, according to panelists at the “Challenges and Opportunities in Housing and Homeownership” session Friday at the National Association of Realtors® (NAR) 2013 Midyear Legislative Meetings & Trade Expo.

“The residential mobility rate (a measure of American moving) in the U.S. has been falling steadily since the 1990s, when it was approximately 20 percent, to its current level of 12 percent,” said NAR Chief Economist Lawrence Yun. “The decline is unwelcome news since it may imply a reduction in economic mobility.

According to Yun, “Mobility is currently being impacted by the lack of housing inventory since fewer homes are available. In the future, proposed regulations requiring larger downpayments (QRM or qualified residential mortgage rules due to be released soon) could also significantly reduce mobility since fewer homeowners may be able to afford a home.”

Lisa Sturtevant from George Mason University’s Center for Regional Analysis said recent trends in residential mobility are most likely the result of changes in the age distribution of the population. The two largest segments of the population – baby boomers and millennials – are delaying many major lifecycle events that have been traditional for their respective life stages, like marriage, children and retirement. That also means they’re not moving as much as members of previous generations at the same life stages.

“Homeownership rates have declined fastest for millennials, most likely the result of fewer job opportunities and higher student debt; however, I believe they still want to become owners and will eventually make their way into the housing market,” Sturtevant said. “When they do enter the market, they’ll care about different things than previous generations too. I foresee more single people buying smaller homes in urban areas.”

Yun agreed that the recent housing downturn hasn’t changed younger buyers’ attitudes about homeownership, despite many of them delaying their entrance into the market. “Rather, reduced home prices and lower interest rates have provided an opportunity for younger buyers to affordably enter the housing market,” he said.

“Higher home prices will unlock a large number of households with negative or low equity and incentivize them to get off the sidelines and into the housing market,” added James D. Shilling from DePaul University’s Institute for Housing Studies. “However, combined with future increases in interest rates, the net effect is likely an overall reduction in residential real estate transactions and household mobility.”

He anticipates the Federal Reserve will keep mortgage rates low through 2013 and most likely into 2014. As a result, most current homeowners will have mortgages with loan rates near record lows. But that also means they’ll think twice about selling a home with a low mortgage to buy a new home when it also comes with a higher rate mortgage.

Lucy Gorham from the Center for Community Capital at the University of North Carolina said that new mortgage regulations proposed by the federal government could also impact the future housing market if they include higher downpayments. While restrictive underwriting helps lower defaults, it keeps more creditworthy borrowers from buying a home. If 20 percent downpayments are required, for example, up to 60 percent of current buyers could fall outside the qualified mortgage criteria and potentially face higher interest rates or fees.

“Despite the recent housing crisis, homeownership continues to help build wealth for lower to middle-income households,” said Gorman “A safe mortgage product with good underwriting helps lower loan defaults; requiring greater down payments simply closes off access to a greater percentage of borrowers.”

Gorham said higher downpayments would also disproportionately impact minorities. Minority families tend to have lower wealth and a greater need for access to mainstream sustainable loan products.

Margaret McFarland, Colvin Institute of Real Estate Development at the University of Maryland agreed that requiring higher downpayments and credit scores excludes many well performing loans from the market.

“Federal Housing Administration loans are an important financing option for affordable homeownership,” she said. “Veterans Affairs home loans also perform very well in relation to other mortgage products, even with a zero downpayment.”

© 2013 Florida Realtors®

Advertisements

Distressed homes lure cash investors

MIAMI – May 20, 2013 – House hunters looking to buy a foreclosure in South Florida often discover they are getting outflanked by the pros: investors wielding cash.

“If you don’t have cash, or you’re looking for financing, you can’t play in the distressed arena,’’ said Doug DeWitt, owner and broker at Concierge Real Estate Services in Miami Beach, who markets bank-owned properties for some major lenders.

When a bank-owned house in the Hammocks in West Kendall went on the market in late April, the 3-bedroom, 2-bath villa drew 29 purchase offers and 60 showings over a 10-day listing period mandated by the bank. The asking price was $159,900.

The lender narrowed the field to the all-cash buyers, who were told to make their highest and best offer, and the house is now under contract.

“It went for well above asking price. They all do,’’ said DeWitt, who is the listing agent. “I have one happy buyer and 28 people I sent on their way.’’

DeWitt said he feels sorry for the first-time buyers and other house hunters looking simply to finance the purchase of a home they plan to live in.

“The banks need to move these properties. The cash offers weren’t low, they were right in line,’’ DeWitt said. “If you can take the [uncertainties of] the appraisal and inspection out of the parameters, your chance of closing goes up substantially.’’

To be sure, homebuyers still can ferret out opportunities to purchase distressed properties. Fannie Mae, for instance, offers financing with low downpayments and no mortgage-insurance requirement on select Fannie Mae-owned homes under its HomePath mortgage program.

“On some of Fannie Mae’s foreclosed properties, Fannie Mae is putting them back on the market and offering up to 97 percent financing,’’ said Ray Barkett, regional vice president and district sales manager at Keyes Realtors in Fort Lauderdale.

Another option, Fannie’s HomePath mortgage renovation program, even provides funds to fix up rundown foreclosures.

One of the top worries during the real estate crash was that the housing market would take another nosedive when lenders dumped a slew of distressed properties on the market. So far, that simply hasn’t come true. Lenders have managed the flow of properties onto the market. Indeed, many real estate agents are clamoring for more such inventory in South Florida, where the inventory of homes and condos for sale has plunged to its lowest level since 2005.

“There is definitely an increase in REO [bank-owned] inventory,’’ said Dewitt, “but the whole theory of shadow inventory dragging down the market has proven completely false.’’

Victor Gonzalez, a Miami real estate investor who bids on foreclosures at Miami-Dade county’s cash-only online courthouse auctions, said banks have gotten more aggressive in bidding on properties they have foreclosed on, rather than letting them go at discounts.

“It’s getting very competitive again. Prices are going up,’’ Gonzalez said.

Even in auctions where lenders don’t take back properties themselves, competition is keen from institutional buyers like hedge funds and investor groups created to snap up distressed properties, Gonzalez said.

And the process is fraught with uncertainty. Scheduled auctions of homes often get cancelled at the last minute for a host of reasons, such as a lender’s decision to go with a short sale.

Those bidding at auctions need to know how to search records for liens. Even so, they can’t be sure how much is due in homeowners’ association or condominium fees. “I research 20 or 30 properties before bidding on one,’’ Gonzalez said.

Copyright © 2013 The Miami Herald. Distributed by MCT Information Services.

Related Topics: Buyer services

Immigration reform worth $500B to housing economy

SAN DIEGO – May 22, 2013 – If current immigration legislation in the U.S. Congress passes – bills that would create a path to legalization for 11 million undocumented immigrants – it would pump more than $500 billion into the U.S. economy over five years, according to a study released by the National Association of Hispanic Real Estate Professionals (NAHREP).

NAHREP estimates that immigration reform, as proposed, would create a new pool of 3 million homeowners and add more than $500 billion in sales, income and spending into the U.S. housing economy.

Based on previous estimates, NAHREP officials calculate that up to 6 million undocumented immigrants would likely pursue legalization and possibly citizenship under the bill, and up to 3 million would pursue homeownership based on the patterns of naturalized Latinos.

“Foreign-born householders have a high value and strong desire for homeownership,” says Juan Martinez, NAHREP president.

NAHREP based its projections on updated data and the approach it used for its 2004 study “The Potential for Homeownership Among Undocumented Workers,” to estimate the economic impact on the current housing economy.

• Assuming past purchase trends among foreign-born householders remain consistent, half expected to pursue legalization – up to 3 million of 6 million undocumented immigrants – would also buy a home once they have legal status.

• Many of undocumented foreign-born householders have age and income characteristics associated with potential homeownership, with household incomes of about $40,000.

• Up to 3 million undocumented foreign-born householders could potentially afford a home worth $173,600, the national median sales price. This would generate more than $500 billion in new mortgages, and about $25 billion in mortgage origination and refinance income.

• The purchases would create $28 billion in income within the real estate community.

• Home purchases by 3 million legitimized immigrants would create $180 billion in additional consumer spending within local communities based on the average $60,000 in associated purchases estimated by the National Association of Realtors in 2012.

“With the possibility of a legitimate path to residency and citizenship, we expect this group to be eager to buy homes,” says Gary Acosta, NAHREP co-founder.

© 2013 Florida Realtors®

Almost 112,000 Floridians benefit from lender settlement

TALLAHASSEE, Fla. – May 22, 2013 – Floridians have received about $8.7 billion in relief under the national mortgage settlement, as reported by the five largest mortgage servicing banks that are parties to the settlement.

According to the latest Settlement Monitor’s report released yesterday, more than 111,000 Floridians have received some type of relief. About $1.39 billion went to mortgage modifications; about $3.15 billion went toward forgiving the entire balance of second liens.

Overall, the average recipient receiving a mortgage modification got $133,560. The average recipient with a second-lien cancellation saw $68,333 removed.

Five banks participated in the settlement, with their numbers confirmed by the Monitor in an independent audit. The five banks include Ally/GMAC, Bank of America. Citi. JPMorgan Chase and Wells Fargo.

“Today’s report indicates that 111,000 Floridians have benefited from $9 billion in relief – significantly more than the $8.4 billion that we expected when we entered the settlement,” says Florida Attorney General Pam Bondi.

Nationally, the five lenders have distributed $50.63 billion in direct relief to over 620,000 homeowners, at roughly $81,000 per homeowner.

A chart detailing the Florida money distribution by type of consumer and bank is available online in PDF format.

© 2013 Florida Realtors®

Existing Home Sales Hit A 3 Year High!

Existing Home Sales Hit A 3 Year High!

<!–mor

Monthly Market Statistics for Palm Beach County

Palm_Beach_County_Townhouses_and_Condos_2013-01_Summary

2013 Palm_Beach_County_Single_Family_Homes_2013-01_Summary

Monthly Market Statistics for Miami-Dade County

Jan 2013 Miami-Dade_County_Townhouses_and_Condos_2013-01_SummaryMiami-Dade_County_Single_Family_Homes_2013-01_Summary

Monthly Market Statistics for Broward County

Broward_County_Single_Family_Homes_2013-01_Summary

Broward_County_Townhouses_and_Condos_2013-01_Summary

What a Picture’s Worth……

Adding a photograph to a listing can translate to a big price bump…

Turns out, a picture is worth thousands of dollars.

Adding at least one photo to a residential-real-estate listing increases the final sale price by up to 3.9%, says Ken H. Johnson, an associate professor of finance at Florida International University’s Hollo School of Real Estate. That can mean an extra $39,000 for a $1 million house.

“If I was selling, I would put every picture I could on the listing, at a ratio of four to five interior vs. one exterior,” says Prof. Johnson. “We’re talking about a few extra weeks in marketing time to get that 3% to 5% increase on a home. That’s a good trade.”

Roughly 85% of the 4,077 houses studied by Prof. Johnson and co-authors Christopher Cain and Justin Benefield included a photo. Interior pictures were more effective than exterior shots, adding a 3.9% price bump vs. 1.9%. Although adding just one photo can result in these gains, Prof. Johnson estimates that each additional photo adds about $150 to $200 to the final sale price.

But be prepared to wait for the payoff: Adding a photo increases the time to sell by 20.6%, meaning the house will stay on the market for an additional 16.5 days, on average, according to the study, “On the Relationship Between Property Price, Time-on-Market, and Photo Depictions in a Multiple Listing Service,” published in the Journal of Real Estate Finance and Economics in 2011.

That’s because photos give consumers more information to consider, slowing the decision-making process, Prof. Johnson says. “You’re getting an information overload. It’s like offering kids a bunch of candy, and they can’t decide which one to take,” he says. But photos also ease uncertainty. Consumers who have a clear idea of what they are buying are willing to pay more and are ultimately more satisfied with the sale.

Prof. Johnson’s research does not differentiate between professional photos and amateur shots, but says he thinks professionally shot photos are much more effective.

Debra Stotts, senior vice president and associate broker at Town Residential in New York City, recently had one of her listings at Trump World Tower at 845 United Nations Plaza reshot to better show off the design, size and views.

To do that, Manhattan-based photographer Michael Weinstein looked for what he calls the single “wow photo” to open the listing. Usually, it’s the living room, but in this case, Mr. Weinstein says he shot the dining room opening into the living room to emphasize spaciousness.

Mr. Weinstein, owner of MW Studio, shares some tips that homeowners and brokers can consider when working on listings. First, he takes into account which direction the windows face and when the natural light will best accentuate the space. Generally, earlier in the day gives a clear, bright light, while later in the day casts a warm glow.

He usually shoots from the corner of a room with a wide-angle zoom lens to depict the room at its largest. He also positions the camera to highlight the unique elements of a home, whether that’s floor-to-ceiling windows, generous hallways or an elegant foyer. Mr. Weinstein charges on a per shot basis at roughly $250 to $1,500 per real-estate shoot, depending on the number of photos used.

Evan Joseph, another Manhattan-based photographer, will sometimes use up to eight lenses in a single shoot. “I look for the camera angle that makes a room open up, maybe being closer to the windows or shooting upward. Sometimes you need to find the spot where the view is the most fantastic, and that spot might be in the middle of a room or on a couch,” he says. Mr. Joseph, owner of Evan Joseph Images, says he charges between $600 and $1,500 for high-end shoots of resale homes.

Both photographers agree natural light is best. But in the case of a cloudy day, Mr. Joseph comes to shoots armed with plenty of studio lighting. Mr. Weinstein skips the lighting but will occasionally turn on interior lamps to add warmth—though that can give the impression that a room is naturally dark.

For the most part, Mr. Weinstein says, touch-ups happen after the shoot with digital photo editing. A cloudy, overcast view can be brightened to show clear blue, sunny skies. Fireplaces are dressed up with fires. He also removes anything unsightly, like wires, scuff marks on walls, vents, even air-conditioners. He adjusts the color as well to accentuate certain features in the homes. “We’ll warm up the floors or warm up the colors of the walls. It’s very subtle, but it can be very effective,” he says.

Especially time-consuming is removing multiple or large elements, like scaffolding seen through a window or a delivery truck obscuring the front, Mr. Joseph says. “People think Photoshop has a magic ‘Remove This’ button, but you have to reimagine, re-create and reassemble the thing that I’m removing,” he says.

One broker notes that retouching shouldn’t misrepresent the space. “Even if a space needs a lot of work, I would show the flaws in the images so people know what they’re getting into,” says Patty LaRocco, senior vice president and associate broker at Town Residential.

Photos have to walk the fine line of showing off a space’s character without making the home seem too personalized, Ms. LaRocco says. “Materials, light and volume are really what I’m after,” she says.

————————–

How photos with property listings affect the sale price and time on market:

  • 3.5% Increase in sale price when an online listing contains one or more photos.
  • 3.9% Increase in sale price when a listing with only one photo shows an interior view.
  • 1.9% Increase in sale price when a listing with only one photo shows an exterior view.
  • 20.6% Rise in the time it takes to sell the property when a listing contains at least one photo.
  • $150 to $200 Estimated increase to the sale price per additional photo.

Source: ‘On the Relationship Between Property Price, Time-on-Market, and Photo Depictions in a Multiple Listing Service,’ 2011, co-authored by Ken H. Johnson, an associate professor of finance at Florida International University’s Hollo School of Real Estate

 

BY SANETTE TANAKA

A New Lease on Luxury

They’ve got the money to buy trophy homes—but for now, they’d rather rent. Hoping to keep cash liquid while watching the direction of the market, more people are paying big sums for temporary digs.

When real-estate developer Don Peebles moved his family to Manhattan from Coral Gables, Fla., he decided to combine two adjacent ninth-floor apartments to create a 4,750-square-foot, seven-bedroom, nine-bathroom home with glass walls on the Upper West Side overlooking the Hudson River. His wife, Katrina, spent two months decorating the apartment with abstract paintings from their art collection, whimsical wallpaper in the kitchen and tufted couches in the living room.

Though the Peebleses invested significantly in their home, they don’t own it. Instead, they are paying $35,000 a month to lease it. Renting also gives them the flexibility change their minds about what neighborhood they want to live in if they decide to move. “Our primary residence doesn’t need to be an investment,” he says.

A growing number of people who can afford to buy trophy homes are instead opting for a more temporary solution: the trophy rental. Some renters say they want to avoid tying up their money in steep down payments and instead are investing their money in the financial markets or their own businesses. Still, they’re willing to spend tens of thousands of dollars a month on a rental to get the lifestyle they want.

As a result, the highest end of the rental market has seen significant growth. In New York, apartments and townhouses priced at $15,000 per month and up represented 1.3% of the market in December, up from 0.5% a year prior, according to Jonathan Miller, president of appraisal company Miller Samuel. Prices are rising quickly as well: the median price for the $15,000-and-up sector is up 23.1% from a year ago. The uptick in rentals mirrors an overall trend nationwide in which the rental vacancy rate fell to 4.5% in fourth quarter of 2012, down from 5.2% a year earlier, according to real-estate research firm Reis Inc. REIS +5.95% —and the lowest since 2001’s third quarter.

Astrid Pillay, a broker with Halstead in Manhattan, found two $35,000-a-month rental townhouses for clients in December and says another recently offered a seller $1 million for a two-year lease on a townhouse currently for sale. A number of her rental clients, she says, are recent sellers of trophy homes who have “just cashed out” and want to wait until the market dips again to buy. Other brokers say limited inventory of houses for sale has also helped the rental market. “At this price point, you’re not just going to settle for whatever is available,” says Noble Black, a broker with Corcoran.

New to the rental market in New York are three penthouses ranging in price from $30,000 a month to $50,000 a month in New York by Gehry, a new high-rise building in Lower Manhattan where one-bedrooms on high floors start at $5,500 per month. The largest unit in the building is a 3,800-square-foot, 76th-floor penthouse that includes a nearby studio apartment for nannies, maids or in-laws. Annual cost would top $600,000 a year.

In California, luxury rents are increasing by 5% to 10% each year, says Bill Witte, president of developer Related California. In San Francisco, where Related California has one luxury rental building and several in the works, rents are already 10% higher than their peak before the recession hit, he says. At the Paramount, the developer’s 40-story rental tower downtown, rents are now more than $4.50 a square foot, up from their prerecession peak of $4 a square foot. Related recently rented a 1,190-square-foot two-bedroom apartment there for $6,850 a month.

In San Francisco’s financial district, Millennium Tower, a 60-story high-rise where venture capitalist Tom Perkins owns a penthouse and retired quarterback Joe Montana rents two apartments, there’s a two-bedroom just under 2,300 square feet available for $15,000 a month.

In Los Angeles, billionaire developer Rick Caruso recently opened 8500 Burton Way, an 87-unit apartment building near Beverly Hills and just last week unveiled its crown jewel: a three-bedroom, fully furnished penthouse unit with a monthly rent of $40,000. Mr. Caruso put $2.1 million into building and decorating the unit—which includes custom-made macassar ebony bookshelves and Hèrmes wallpaper in the bathrooms—and says it is the priciest rental in Southern California. (A penthouse unit at 1221 Ocean Ave., a luxury building that overlooks the Pacific in Santa Monica where Britney Spears once lived, doesn’t even come close, at $27,000 a month).

In Miami, rentals that were going for $25,000 a month a year ago are now renting in the $40,000 range, says Greg Mirmelli, a principal and founder of GM Real Estate in Miami. A home on Sunset Island, for example, now rents for roughly $40,000, up from $30,000 two years ago.

Daniel de la Vega, a managing partner of One Sotheby’s Realty in Miami, says he’s got six listings for condos or homes above $30,000 a month or more, which are leasing much faster than usual, mostly to foreigners who will eventually buy something. A private gated home on the beach recently rented for $90,000 a month; it is also available for sale for $14.9 million.

The rise of the trophy rental comes as many Americans continue to abandon ownership in the wake of the country’s housing crisis and credit crunch. The U.S. homeownership rate was 65.3% in the third quarter of 2012, its lowest level since 1996, according to the Census Bureau. In the midst of the housing boom, in 2004, the homeownership rate reached 69.4%.

“We are definitely seeing gravitation toward higher leases,” says Billy Rose, president and co-founder of the Agency, a real-estate firm in Beverly Hills. “A lot of the private-equity guys we see who used to buy are choosing to rent places for $10,000 or $15,000 a month now because they would rather play the market than buy a house,” adds Mauricio Umansky, Mr. Rose’s partner and Agency co-founder.

Jonathan Moore, a 25-year-old entrepreneur, currently leases a two-bedroom at the Ritz-Carlton Residences at LA Live in downtown Los Angeles for $6,200 a month. Mr. Moore, who runs an alternative investment-management company called GCM Capital Management, says that right now he would rather keep his money in his business rather than plunk it down on a large down payment, especially when he doesn’t plan to stay in one place for more than five or 10 years. “I am an illiquid millionaire, so it would be hard for me to unwind my stake in my business,” he says. “But this way, I get all the benefits of being a homeowner, and all the luxury amenities, without the financial downsides.”

Renting, of course, does have its drawbacks. Renters may be subject to landlords raising fees or refusing to renew a lease, for example. With homeownership, “you have some security with respect to the ability to control your own destiny,” says Stuart Gabriel, the director of the UCLA Ziman Center for Real Estate. Still, ownership typically only makes economic sense for those looking for stay put for several years. Property values need to appreciate enough to cover closing costs and other fees. “You’re speculating on housing prices and included in that speculation is the cost of buying and selling, which can be substantial,” he says.

Real-estate brokers say their listings for the largest, most-expensive rental apartments tend to go very quickly—sometimes exceeding their asking prices. Bo Poulsen, a broker with Town Residential in New York, says he recently had four offers for a TriBeCa apartment asking $18,500 a month shortly after it hit the market. It ended up renting for $21,000. “That definitely was not happening a year ago,” he says.

According to real-estate tracker Streeteasy.com, the median amount of time a New York rental property above $15,000 a month spent on the market was 10 weeks, down from 12 weeks in 2011.

The relatively low inventory and high demand means unsolicited rental offers on for-sale properties have become commonplace. Restaurateur Jeffrey Chodorow recently received an offer of $75,000 a month to rent his 3,700-square-foot Manhattan condominium, which is on the market for $18.8 million, says his broker, Oren Alexander.

Limited availability of homes for sale is also driving buyers to the rental market. “If you want to live in a brand new apartment, there just isn’t anything available right now—every building is full,” says Gregg Lynn, a luxury broker at Sotheby’s International Realty in San Francisco. “You have to wait until 2015 for new construction.”

Some of the newest high-end rental buildings were originally designed as boom-era condominiums and converted when sales were slow. In many cases, owners opted to rent the units because they didn’t want to sell them at distressed prices.

In Hollywood, the Avenue was converted into rental apartments from condos when its backer fell into bankruptcy. The building now features $7,000- to $11,000-a-month penthouses with 25-foot ceilings. It is already 95% leased. “When we took over the project, it was a half-done busted condo deal,” says Rob Goodman, chief executive of Resmark Cos., which opened the Avenue.

Ken Kahan, founder of real-estate company California Landmark, is currently building three luxury rental buildings in Los Angeles. One of those projects, the bw in Brentwood, was originally designed as a condo project that Mr. Kahan converted to a rental development after the recession hit because it became too difficult to secure financing for condominiums.

The new demand for luxury rentals has spurred the expansion of several national companies, including AKA, which has rental buildings in New York, Philadelphia, Washington and London. Later this month, AKA is completing the finishing touches on a luxury rental in Beverly Hills, where furnished apartments under 2,000 square feet rent for $12,000 to $16,000 a month. That development offers amenities such as a 50-seat screening room and a private entrance to Spago, an upscale Beverly Hills restaurant that will also deliver room service to residents.

Related Cos., a major apartment developer, just launched their priciest rentals ever in New York in a Midtown building called One MiMA Tower. After seeing condos renting in another development for over $20,000 a month, “we thought, let’s go here because we can actually cater to this submarket that exists, but no has been addressing,” says Daria Salusbury, a senior vice president with the company who oversees leasing. The smallest units in One MiMA, junior one-bedrooms, start at $4,800 a month. Three-bedroom penthouses with 2,200 square feet are priced as high as $25,000 a month.

The company also broke ground last month on its long-stalled billion-dollar project on Grand Avenue in downtown Los Angeles. But rather than beginning with the planned first phase of the project, which involved building 390 condos in two structures, the company is instead building luxury rental apartments. “We knew we could take a run at a rental building with the rental market strengthening,” says Related California’s Mr. Witte, “whereas condo prices, while they are beginning to creep back up, aren’t high enough to justify new construction.”

Wealthy individuals are also getting into the game, buying condo units expressly to rent out as a steady investment vehicle. Last fall, the El Royale, a 56-unit Art Deco tower near Hollywood, sold for $29.5 million to investors looking for rental properties. At $527,000 per unit, it is one of the highest prices ever paid for an older building in Southern California. Likewise, the Frank in Venice sold last year for $56.7 million, or $810,000 per unit, one of the highest prices ever paid per unit in Los Angeles.

“The huge tenant demand for luxury rentals in coastal gateway markets has made them the most attractive real-estate investments right now,” says Ron Harris, who brokered both of those sales.

Corrections & Amplifications 

An earlier version of this article stated that broker Astrid Pillay found two $35,000-a-month rental apartments for clients in December. The properties were townhouses.

By CANDACE JACKSON and LAUREN SCHUKER BLUM