LA’s tight real estate market and our very much in demand neighborhood has started some new trends. Well, maybe not new, nothing is really new, especially in real estate, right?
First, we learned about a Tenancy In Common (TIC) ownership when local realtor Ali Jack, Compass Realty gave us a tour of 500 North Bronson, a recently renovated four-unit building. All TIC agreements are different but, in this particular property, each owner will own 25 % of the overall building with the right to use the unit they live in, according to Jack.
TICs are not new, but they are relatively new in the LA market, explained to Jack. The tight housing market in San Francisco spawned lots of TIC projects as owners of old, historic properties were looking for ways to get some cash out of their properties by selling some but not all of the building or and potentially get more revenue than selling to one single buyer.
“In California the TIC ownership model with individual “space assigned occupancy rights” is the TIC model most often compared to condos. It started in Northern California nearly twenty years ago due to housing scarcity and in the Bay Area it has matured, is commonly accepted and has comprised, at times, up to 30% of that market,” explains Jack’s website.
Because it’s a relatively new form of ownership, Jack says there’s currently only one lender in Southern California, though she said more may be coming soon. But for now they only offer interest only loans, no 30 year fixed mortgages, but she added most people refinance every few years. Interest rates are rumored to be heading down again, so maybe it’s a good time to check it out.
Jack is holding 500 North Bronson open today and Sunday from 2-5 pm.
We also heard from several realtors that some owners have decided to lease their properties rather than sell. Alex Dionne of Keller Williams Larchmont told us that she recently leased a Hancock Park home that had been for sale because the owners found it beneficial to lease rather than sell at this time.
“There’s not much inventory for rent or lease, right now and the monthly rentals are quite high, like a monthly mortgage payment, so it made sense for the owner to rent rather than sell,” Dionne told the Buzz.
We’re out there buzzing around, checking out neighborhood real estate, feel free to send us comments and suggestions!