As February opens, a good many of us are wondering what happened to January and how are we already at this year’s 2^nd month. There was much activity in LA real estate in January and we watched carefully to look for signs of how this year will play out for market factors. From those signs, my forecast is positive...but we may have to wait a few months for the full market benefits.

One of the most discussed topics locally is the new closing Transfer Tax for luxury properties priced above $5 Million, approved by voters. Above $5M and up to $10M, the tax levy will be 4% of the selling price. Above $10M, the tax levy will be 5%.  Those are serious amounts. The tax will go into effect April 1^st and already the anxiety levels are rising as the date approaches.

Buyers hope that the threat of the higher closing cost will cause Sellers to be more negotiable. We are already seeing that impact even this early as Sellers instruct us to reduce their price to attract a swifter deal. Sellers are hoping that the tax will become readily accepted into the marketplace --- as it has in other large US cities where it already exists, and that Buyers will understand that the tax is included in the selling price. So there is a potential standoff between sides.

On happier notes, February brings the lovers favorite day – Valentine’s. It also thrills sports fans with the Super Bowl. So there are some distractions from the current real estate fray that are pleasantly welcome. Now if the Feds will lower interest rates as has been predicted and promised, the market temperament may elevate to match the happy reasons why February can be one of the most enjoyable months for Angelenos. Happy Valentine’s Day and may your Team win!

-Ernie