It’s the middle of June as I write this, and the same issues plaguing the market for years are still vexing buyers of Palos Verdes homes and South Bay real estate …. LACK OF SUPPLY.

We will get into the numbers in just a moment, but first, what are the reasons why the supply of listings is so low? In my opinion, there are two reasons that stand out.

• Capital Gains Tax pain

• Who wants to give up there 3% home mortgage interest rate they used to buy their current home a few short years ago?

Let’s talk about capital gains for a minute. Even if you take into account all the capital improvements you’ve made to your home, the purchase price of your home, the closing costs you paid when buying, your current projected sale price, the closing costs associated with selling, and finally, if you’re married, the $500,000 exclusion, many of you who bought decades ago and are looking to scale down, or move out of the area because of retirement, bought at very, very low prices relative to what prices are today. After you consider all of the above deductions, which lighten the capital gains tax burden, what’s left over is likely in the $1,000,000 - $2,000,000 or more range. Even if you have no income because you sold your house, the government thinks you’re filthy rich. So, guess what? You’ll pay at the highest marginal tax rates for long-term capital gains …. that means 20% for the Feds, 13.3% for the State, and, don’t forget, an additional wealth tax of 3.8% for Medicare. So if you have $1,000,000 in capital gains, you’re writing checks for about $371,000.

This is why, sadly, about 40% of my selling clients are successor trustees. They are usually surviving adult children of deceased parents. Now, since the home’s tax basis gets “stepped up” to the property's value at the time of the decedent’s death, there usually is very little or any capital gains tax paid! You can read up more on the duties of a successor trustee here. Watch the video below and then study the charts.

How many homes will be listed in July of 2024

Using AI technology, I’m able to project how many homes will be listed in the South Bay for July of 2024; approximately 122. But that’s just one side of the coin. What of demand. Will demand, as evidenced by new pending sales, be stronger or weaker than supply?

About 80 homes will be escrowed in July of 2024. Relative to supply, that’s a success ratio of 65.6%. That’s not as high as what we experienced in early 2022 when the ratio was 112%, almost 2x the market strength as what I’m projecting in July, but it’s not as low as what we experienced in October of 2022 when the ratio was only 57%.

If you’re thinking of selling, how do you start the process? Before talking with any real estate broker, doing a little spying might be a good idea. What websites are Buyers using to determine the “fair market value” of the house they’re interested in? You should look up your own home! There are dozens of online computer algorithms, but they all have the same fault. The companies running them are data mining your computers and mobile devices. They scrape your personal contact information and search patterns and then sell that data to their advertisers. Nice, huh?! The same is true for online home search sites.

There is a solution. Firstly, the home value algorithm I use is one of the most accurate. Appraisers use it. Plus, when you register on any of my sites with your email and cell number, your information stays PRIVATE and CONFIDENTIAL. I never sell or share your data with anyone. You won’t get spam calls, texts, or emails from my systems because I will never share or sell your private information!

Use this site to help you put a finger on the pulse of “fair market value”. You will get an estimate of what a buyer might pay for your home today and a heat map showing how many buyers are searching for a home like yours! This data is beneficial. Once we meet, I can show you how to measure this demand across different price points you’re considering listing your home. And to search homes in private, go here