Monday Morning Quarterback

Diddy Listed His LA Mansion Right Before He Got Arrested. While Sean "Diddy" Combs sits in a Manhattan courtroom, facing off with his sexual abuse accusers, his enormous estate has been listed for sale. Combs listed the 10-bedroom, 13-bathroom mansion in LA's ritzy Holmby Hills neighborhood for $61.5 million a week before his arrest in September 2024 — and it's unlikely to sell anytime soon. His ex-girlfriend, R&B singer Cassie Ventura, testified last week that Combs' South Mapleton Drive home was not used for any "freak offs" (dayslong sex performances that the trial centers on). Regardless, homes priced in the eight-figure range don't fly off the shelves that quickly. Worse, most homebuyers are put off by its association with an accused sex trafficker, according to a consultant who specializes in selling homes tainted by murder or other disasters. As expected, the listing agent, Kurt Rappaport, didn't return multiple requests for comment. Combs purchased the property on Mapleton Drive in 2014 for just over $39 million, according to L.A. County property records. The main house's architecture excludes European vibes and contains a formal dining room, a wine cellar, a theater that fits 35 people, a kitchen, and a separate catering kitchen. A two-story guest house has bedrooms, a gym, and a recording studio. The grounds, over 1.3 acres, have an oversize statue of a woman seemingly made from similar material to a disco ball, plus a swimming pool with a waterfall and grotto, a basketball court, a spa house, and an outdoor loggia with a barbecue, bar, and pizza oven. Combs' home was searched earlier this year by the feds, who found "freak off" supplies there. Law enforcement officials seized "narcotics and more than 1,000 bottles of baby oil and lubricant" from his Los Angeles residence. 1,000 bottles of baby oil! Forget the home, who needs that much baby oil?

Santa Monica Pier Again Ranks Among State’s Worst Polluted Beaches. The beach adjacent to the Santa Monica Pier has again been named one of California’s most polluted, landing in second place on Heal the Bay’s annual “Beach Bummer” list, part of the environmental nonprofit’s 35th Beach Report Card released on Thursday. The report, which assigns weekly water quality grades to more than 700 beaches along the Pacific Coast, found that the pier continues to suffer from persistently high levels of fecal-indicator bacteria, particularly during the dry summer season. The report is based on 2024 data and shows the pier receiving a failing grade, despite years of remediation efforts. “Every day, families who visit Santa Monica for a day of fun in the sun may be unknowingly risking illness by splashing in polluted waters,” says Tracy Quinn, CEO of Heal the Bay. “It’s time for the City of Santa Monica to prioritize efforts to identify and reduce bacteria levels at the Santa Monica Pier.” Naomi Maurice, a water quality data analyst at Heal the Bay, said the pollution under the pier remains a chronic concern. “We’re seeing high levels of bacteria at this beach almost daily,” she said. “Millions of people visit the pier each year and plenty of them are getting in the water, especially during the warmer season. We want to make sure that this area is safe for swimming, but unfortunately that’s just not what the data is showing.” Santa Monica city officials responded Thursday by noting that the report’s failing grade applies only to the ocean water within 100 yards north and south of the pier. “Santa Monica’s beaches are wide and expansive,” a spokesperson from City Hall said. “The majority of our three miles of coastline is highly rated by Heal the Bay.” The city emphasized that nearby beaches, including those near Wilshire and Pico boulevards, received A+ and B grades, respectively. Officials also pointed to stormwater diversion systems and bird-deterrent netting as evidence of ongoing efforts to address the problem. The Santa Monica Pier’s second-place finish on the “Beach Bummer” list placed it just behind Playa Blanca in Baja California, which suffers from sewage-contaminated runoff related to failing infrastructure near the Tijuana River.

Housing Starts Rose 1.6% in April. Housing starts rebounded modestly in April after a steep drop in March but the details of the Commerce Department report were not favorable. Looking at the big picture, homebuilding seems to be stuck in low gear, hovering around 2019 levels, as builders struggle with the most single-family inventory since 2009 along with high home prices and relatively high mortgage rates. Now, builders must also contend with the uncertainty of new tariffs and how they’ll affect their building costs. That struggle can be seen in the data, as single-family starts declined 2.1% to a nine-month low, and permits fell 5.1% to the lowest level in nearly two years. April’s gain was entirely due to a 10.7% jump in the volatile multi-unit category. In the past year, multi-family starts are up 30.7% while single-family starts are down 12.0%. It appears that part of the reason why homebuilding has lagged is due to builders focusing on completing projects. Home completions declined 5.9% in April but have been running hot since last year. The 1.458 million completion rate in April outpaced starts and is the only month below a 1.5 million pace (our estimation of annual homes needed to keep up with population growth and scrappage) in the last twelve months. With strong completion activity and tepid growth in starts, the total number of homes under construction continues to fall, down 14.3% in the past year. That type of decline is usually associated with a housing bust, but economists don’t see that happening. With the brief exception of COVID, the US has consistently started too few homes almost every year since 2007. As a result of the shortage of homes, economists think housing is far from a bubble and expect housing prices to continue moderately higher in 2025 in spite of broader economic headwinds.

April Existing Home Sales Dropped To Slowest Pace Since 2009. The spring housing market continues to struggle amid high interest rates and low consumer confidence. Sales of previously owned homes in April fell 0.5% from March to a seasonally adjusted, annualized rate of 4 million units, according to the National Association of Realtors. That is the slowest April pace since 2009. Sales were down 2% from April of last year. Housing economists were expecting a gain of 2.7%. This count is based on closings, meaning contracts that were likely signed in February and March, before mortgage rates moved higher in April. Inventory jumped 9% month to month and was nearly 21% higher than April of last year. There were 1.45 million homes for sale at the end of April, which at the current sales pace represents a 4.4-month supply. That is the highest level in five years, but still below the six-month supply which is considered a balanced market. One year ago, there was a 3.5-month supply. More supply is starting to cool prices. The median price of an existing home sold in April was $414,000, an increase of just 1.8% year-over-year. That is the highest April price on record, but the slowest appreciation since July 2023. Annual price gains had been much higher last year. Homes sat on the market an average 29 days, faster than March, but longer than April of last year. First-time buyers accounted for 34% of sales, almost the same as last year. Cancellation rates, or how many people cancel their contracts, are also rising, hitting 7% of sales in April. That is up from a recent average of 3 to 4%. Activity is still stronger on the higher end of the market. Sales of homes priced over $1 million rose nearly 6% from a year ago. Those priced between $100,000 and 250,000 dropped just over 4%.

Questions Loom Over Trump’s Order To Create Housing For 6,000 Homeless Veterans. President Trump’s Executive Order calling on the Department of Veterans Affairs to house thousands of homeless veterans on its West Los Angeles campus by the end of his term promises the relief veterans have been seeking in federal court for more than a decade. But the May 9 order gave no insight into how the president planned to overcome hurdles that have long stymied the dream of a vibrant veteran community on the 388-acre property (which was donated to the U.S. government in 1888 as a home for disabled soldiers). Trump’s order calls for establishing a National Center for Warrior Independence (with the capacity to house about 6,000) “in which homeless veterans in the Los Angeles metropolitan area and around the nation can seek and receive the care, benefits, and services to which they are entitled.” Veterans and their advocates, who have been critical of the VA’s management of the grounds, welcomed the announcement as a presidential endorsement of their cause, but generally reserved judgment over what they expect it to accomplish. Some were openly skeptical. Among the questions not addressed in the order: How much would such an ambitious project cost? Is there enough room for that much housing? And how might the president’s vision fit in with projects already underway to build 1,200 housing units or a judge’s order, now under appeal, for at least 1,800 more? Based on current construction costs, Congressman Brad Sherman estimates that the housing would conservatively cost $3.3 billion, a figure he said would require congressional authorization. Sherman contrasted that potential outlay with the administration’s plan to cut spending by reducing the VA staff. A 2016 master plan, drawn up under a settlement of the first case and updated in 2022, lays out a footprint for adding 1,200 units of new housing through a combination of renovating existing buildings and erecting new ones. Close to a decade later, only 448 of those units are completed, a number the VA estimates will climb to 730 next year.

Trump Proposes Cuts To Federal Rental Assistance. Wait, there’s more! If they haven’t already turned everything upside down, the administration now wants to sharply reduce funding for federal rental assistance that helps hundreds of thousands of California households afford a home. The LA Times reports that the plan, part of the president’s 2026 budget proposal, calls for a 43% reduction in funding available for a variety of programs it labels “dysfunctional,” including public housing and the voucher program commonly known as “Section 8.” Millions use these programs nationwide, mostly to rent to landlords like you and me. More than 5 million American households use some form of federal rental assistance, with 560,000 of those residing in California, according to estimates from the Center on Budget and Policy Priorities. The administration says it is seeking to give states more responsibility and flexibility on how they are run, while also proposing “able bodied adults” receive rental assistance for only two years, thus ensuring most funds flow to the elderly and disabled. The proposal has drawn sharp criticism from advocates for low-income households, who say it would worsen the housing affordability crisis, increase homelessness and unfairly punish workers whose bosses simply don’t pay them enough. According to the National Low Income Housing Coalition, minimum-wage workers can afford a market-rate, one-bedroom apartment in only 6% of U.S. counties (while working 40 hours a week). Worse, there’s no county where such workers can afford a two-bedroom. In addition to slashing rental assistance, the administration is seeking to cut money specifically set aside for homeless programs. For now, the proposals are just a wish list.

Moose Gives Birth In Front of Alaska Hospital. It could only happen in Alaska. In Anchorage, Providence Hospital is known as the place babies are born, but a moose calf? Yep! Ironic that a moose would select this children’s hospital to have her baby calf. But that was the scene last Thursday morning on a patch of grass outside Providence, where a mama moose gave birth to the city’s newest calf. Mom was obviously looking for a soft and quiet piece of grass. But why would a moose give birth on a patch of grass in front of a baby hospital? It makes sense if you think about it. Moose tend to give birth near hospitals because, while they hate humans, they hate bears more, and they have learned that places that have lots of humans do not have a lot of bears. Plus, hospitals tend to have larger campuses with lawns and foliage, and people (usually) steer clear of moose when they are sighted, which makes them ideal locations to drop a calf. The birth was captured on video by onlookers who were watching safely from behind glass windows in the building. One video, taken by an onlooker who identified herself as Louise C., depicts the mother moose standing up moments after the calf was born as she begins to lick her offspring and nurture the newborn (you can see the video on YouTube). Louise said she was walking to the hospital’s café nearby when she noticed the crowd. “I see a ton of people peering over the balcony and I’m like, ‘What’s going on?’ and so I go over and there’s a moose giving birth, and it’s so exciting because this is a once-in-a-lifetime miracle to witness,” she recalls. “It was just the cutest thing ever and I’ve never witnessed anything like that.” For the record, the Alaska-Yukon race of moose can weigh up to 1,600 pounds and up to six feet tall, according to the Alaska Department of Fish and Game. Despite their enormous size, they do have predators, specifically black bears and brown bears. By the way, Providence Hospital is no stranger to moose encounters; two years ago, a moose wandered into the lobby after she reportedly noticed delicious (albeit decorative) potted plants through glass panels from outside.

Basic Training Investing Boot Camp. Our super-duper semi-annual Basic Training Boot Camp will be held on Saturday, May 31, 2025, 9:00 am to 6:00 pm. Everything you ever wanted to know about real estate investing but were afraid to ask. Plus special guest speaker! Iman Cultural Center, South Hall, 3376 Motor Avenue (between National and Palms), Los Angeles, 90034.The cost of the Boot Camp is $249.00 per person. So don’t wait to register. (Gold Members and former Boot Campers can attend for FREE, but still need to register.) Plus free parking. Please register at our website, LaRealEstateInvestors.com.

June LAC-REIA Meeting. Join us on Thursday night, June 12, 2025, 6:30 to 9:30 pm, when Ken Letourneau shows us how to invest in tax liens and tax deeds. For the past 15 years, Ken has specialized in tax lien certificates and tax deed properties, actively participating in tax sale auctions across the United States. Ken’s expertise is built on a foundation of hands-on experience — from navigating complex deals to overcoming real-world challenges. He doesn’t just talk the talk; he walks it. His continued participation in auctions keeps him at the cutting edge of the tax sale space. Iman Cultural Center, 3376 Motor Avenue (between National and Palms), Culver City CA. FREE Admission. Please RSVP at our website, LARealEstateInvestors.com.

Vendors Expo Returns! Our world-famous "Vendors Expo" returns in 2025, on Thursday night, June 12, 2025. The Vendor Expo opens starting at 6:30 pm. We'll have 30+ of the finest vendors featuring real estate products and services you will want to utilize as a successful investor. Our Vendor Expo will be held at the Iman Cultural Center, 3376 Motor Avenue (between National and Palms), Culver City CA. FREE Admission. Please RSVP at our website, LARealEstateInvestors.com.

LAC-REIA schedule for 2025

This Week. Markets will be closed today for Memorial Day. For economic reports, Consumer Confidence from the Conference Board and Durable Orders from the Census Bureau will come out tomorrow. Personal Income and the PCE Price Index, the inflation indicator favored by the Fed, will be released on Friday from the Bureau of Economic Analysis.

Weekly Changes:

10-Year Treasuries: Rose 005 bps

Dow Jone Average: Fell 120 points

NASDAQ: Fell 500 points

Calendar:

Tuesday (5/27): Consumer Confidence

Tuesday (5/27): Durable Goods

Friday (5/30): Core PCE

For further information, comments, and questions:

Lloyd Segal

President

Los Angeles County Real Estate Investors Association

Lloyd@LARealEstateInvestors.com

310-792-6404