Monday Morning Quarterback

Here’s a cautionary tale you should remember the next time you grumble about your insurance bill. Camp Mystic was in the news last month when the Guadalupe River overflowed. Located in a low-lying area along the river in a Texas region known as “flash flood alley,” Camp Mystic lost 27 young campers and counselors when historic floodwaters tore through the camp before dawn on July 4. But what you don’t know is that for the past several years Camp Mystic has paid their attorneys to repeatedly file appeals with The Federal Emergency Management Agency (“FEMA”) to remove Camp Mystic’s buildings from FEMA’s 100-year flood map, loosening oversight as the camp expanded in a dangerous flood plain, according to the Associated Press. Why would the Camp do that, you ask? Because in 2011 the prestigious girls’ summer camp was included in a “Special Flood Hazard Area” in the National Flood Insurance Map for Kerr County (which means it was required to have flood insurance and faced tighter regulations on future construction projects). But Camp Mystic appealed. In response to their appeal, FEMA in 2013 amended the county’s flood map to remove 15 of the camp’s buildings from the hazard area. (Records show that indeed those buildings were destroyed by last month’s flood.) After further appeals, FEMA again removed another 15 Camp Mystic structures in 2019 and 2020 from the designation. Experts say Camp Mystic’s repeated requests to amend the FEMA map were attempts to avoid the requirement to carry flood insurance, but also to lower the camp’s existing property insurance premiums, and to pave the way for adding new structures (under less costly regulations) in otherwise dangerous locations. Syracuse University associate professor Sarah Pralle (who has extensively studied FEMA’s flood map determinations) says it is “particularly disturbing” that a camp in charge of the safety of so many young people would aggressively attempt to receive exemptions from basic flood regulations. Her research shows that FEMA approves about 90% of map amendment requests, and the process favors the wealthy and well-connected, who have the money to hire attorneys to file appeals to revise the flood plain maps. A study she published in 2021 with researcher Devin Lea analyzed more than 20,000 buildings that had been removed from FEMA flood maps. It found that the amendments occurred most often in places where property values were higher, more white people lived, and buildings were newer. In other real estate news, let’s dig deeper…

Visiting Ozzy Osbourne’s Hidden Hills Home. Sadly, Ozzy Osbourne, the heavy metal music and reality TV show icon, died on July 22, 2025, at the age of 75. The Black Sabbath frontman was born John Michael Osbourne on December 3, 1948, in Birmingham, England. From the pioneering heavy metal band’s founding in 1968, Osbourne, nicknamed the “Prince of Darkness,” served as lead singer. From 2002 until 2005, the “Crazy Train” singer starred in The Osbournes, an early reality television hit that followed the lives of the Grammy-winning rockstar, his wife, Sharon, and their children, Kelly and Jack. The rockstar’s Hidden Hills, 10,000 sq. ft. family home was featured in Architectural Digest in 2011. The Osbournes tapped celebrity favorite designer Martyn Lawrence-Bullard to decorate the dwelling. The couple's design strategy (let’s call it “Contemporary Goth”) will be familiar to anyone who watched MTV's wildly successful reality series depicting the squabbling domestic life of the charmingly dotty heavy-metal star and his family. The designer set aside the Moorish influences he's so fond of for a refined, yet comfortable English country-house feel, combining reclaimed-wood floors and Victorian-era barn doors with French antiques and painted-silk wall coverings. The living room off the kitchen is the centerpiece of the home. "This is where Ozzy liked to sit and paint," Lawrence-Bullard says. A collection of Sharon's antique Italian puppets and dolls finds a setting here. Through the barn doors, in the kitchen, along with a profusion of English tea sets and vintage Americana, lies another prized possession: a rustic dining table that has been with the family for years. Just steps away, a narrow staircase lined with framed gold and platinum albums tracing Ozzy's career leads down to a state-of-the-art recording and rehearsal studio. The renovation made space for enormous walk-in closets, in addition to his-and-her bathrooms and home offices. Sharon's office, which displays framed classic Cecil Beaton fashion photos, is where she runs the Osbourne brand, managed Ozzy's recording and global touring schedule as well as her own busy calendar (she cohosted CBS's daytime show The Talk and was a judge on NBC's America’s Got Talent).

Mortgage Rates Plunge To 10-Month Low. Mortgage rates are plunging as the financial markets try to make sense of the poor July jobs report (probably the last time we will receive “reliable” job reports). The average rate on a 30-year mortgage fell to a 10-month low of 6.57% last Monday, down from 6.74% on July 28, according to Mortgage News Daily. Investors and homeowners looking to refinance may be wondering if it’s a good time to jump in, or if they should wait to see if rates drop even further. That’s a tough decision at a time when the U.S. economy‘s future looks uncertain and finding a new job has gotten harder for people in search of work. People have been putting off buying homes due to uncertainty about our economy, according to a recent survey by Bright MLS. But at the same time, many buyers and homeowners have been waiting for mortgage rates to drop. At present, “there’s a lot of opportunity out there for both home buyers and homeowners,” Alex Elezaj, chief strategy officer at United Wholesale Mortgage, told CBS MarketWatch. When rates drop, homeowners can look at not only lowering their existing mortgage rate, but also shortening their loan term, he added, such as going from a 30-year to a 15-year mortgage (if they are able to afford it). A shorter-term mortgage allows the borrowers to pay off their mortgage faster and reduce interest payments. With the average rate on the 30-year mortgage at its lowest level since October, borrowers who are refinancing from higher interest rates could see substantial monthly savings. The big drop in mortgage rates is fueled in part by investors flocking to the 10-year Treasury note, which is seen as a risk-free asset. That’s pushing down 10-year yields, which in turn brings the 30-year fixed-rate mortgage down, as the two move in tandem. Investors are also betting on a higher likelihood that the Federal Reserve will cut its benchmark interest rate at its upcoming September meeting. Whether mortgage rates will keep falling is unclear. Even though rates dropped significantly over the past week. That’s in addition to the fact that the financial markets already expected the jobs report to show signs of weakness. In other words, whether mortgage rates drop further will depend on whether our economy shows further signs of weakness before the Fed’s next meeting on Sept. 17.

Climate Change Is Affecting Your Home Insurance. Weeks after wildfires burned more than 16,000 homes and buildings around Los Angeles this winter, Federal Reserve Chair Jerome Powell offered Congress a grim view of America's insurance markets. Premiums across the U.S. have jumped 24% on average in the past few years, according to the Consumer Federation of America, in part because climate change is driving more intense storms, floods and wildfires. Insurers and banks have already retreated from some of the riskiest parts of the U.S., Powell told lawmakers, like coastal communities and areas prone to blazes, including parts of California. "If you fast-forward 10 or 15 years," Powell said, "there are going to be regions of the country where you can't get a mortgage." The consequences of that kind of meltdown would be profound. People need insurance to get a mortgage to buy a house. If people can't get mortgages, property values fall. That strains local governments, which depend on property taxes (linked to home values) to fund public services like police and firefighters. As insurers drop customers in high-risk areas, a lot of Americans have been pushed onto expensive state-run plans with limited coverage (i.e. California Fair Plan). That means homeowners who lose insurance often struggle after disasters to rebuild or move. "Everything has a price," says Ben Keys, a real estate and finance professor at the Wharton School at the University of Pennsylvania. "And so, it's not that areas become uninhabitable. It's that it's so wildly unaffordable to find insurance that only the very wealthiest people could afford to live there — to bear those kinds of risks themselves." For insurers, the bill for disasters keeps growing. One way to lower the cost is for homeowners and communities to better protect themselves from storms and fires by investing in things like fortified roofs and by thinning forest vegetation. That kind of work has already started. However, insurers rarely consider what has been done to make a property more resilient when deciding to offer or renew coverage, says Dave Jones, California's former insurance commissioner and the director of the Climate Risk Initiative at the Center for Law, Energy & the Environment at UC Berkeley Law.

Altadena’s Rough Real Estate Market. As more and more Altadena residents choose to sell their fire-ravaged properties instead of rebuilding, owners are encountering a softening real estate market in which prices and the rate of sales are both declining, according to data from the Los Angeles Times. It’s impossible to know the long-term prospects of the market, but real estate agents and others say property sales are slowing as inventory grows, and owners list their properties at lower prices. The shift comes at a crucial moment — six months after the Eaton fire destroyed more than 6,000 homes, residents are facing the wrenching dilemma of whether to rebuild or move on. But now, with a greater number of lots on the market and relatively few closing sales, the “absorption rate is going down, down, down.” In the first week of July, 29 new lots went on the market in Altadena, but only four sold. One agent said a couple came to her in March with a lot she estimated would get $905,000. Now they’re ready to list, but with a far lower estimate: $730,000. The homeowner cried when she heard the figure, saying, “This is all we have to move on.” Another lot one Realtor represents dropped from $1.295 million to $795,000. Soon after the fires, the average lot sold in Altadena for up to $72 per square foot. However, current listings average closer to $69 per square foot and are a struggle to sell. This equates to a $21,000 decrease in the price of a 7,000-square-foot lot. Of course, this is just a snapshot of a moment, and it is possible the Altadena market will improve. I say this because Southern California has long suffered from a housing shortage, and many believe Altadena will remain a desirable location to build and live. For example, among the biggest buyers of land in Altadena is Black Lion Properties, a limited liability company that offers little information online and is managed by brothers Jesse and Edwin Castro. Edwin, who grew up in Altadena, won a $2-billion Powerball lottery jackpot in 2023 and has used some of his winnings to purchase more than a dozen lots burned in the Eaton fire. The brothers have bought the second largest number of Altadena lots since the fire (at least 13), narrowly trailing real estate developer Ocean Development (at least 16). Black Lion plans to use some of the lots for their family. The Castro family home in Altadena was spared in the Eaton fire, though a luxury property they owned in Malibu burned down in the Palisades fire.

The World’s Worst Tourist Traps in 2025. Whether it’s the crowds, the cleanliness, the noise, long lines, or price gouging, some of the world’s best known tourist attractions just don’t live up to the hype—and a new analysis by eSIM company Nomad has unearthed where the world’s worst tourist traps are in 2025. The study’s authors analyzed TripAdvisor reviews for the most popular tourist attractions in the world’s 50 most-visited countries, according to data from the United Nations’ World Tourism Organization. Then, taking the text from the online reviews, the study counted the number of times each attraction was negatively described as a “tourist trap” to uncover which of the world’s top destinations left their visitors the most underwhelmed. There was a two-way tie at the top of the worldwide list for 2025, with two American destinations (Wall Drug, South Dakota, and Fisherman’s Wharf, San Francisco) both being labeled a “tourist trap” 1000 times each. Coming in second in the study was Europe’s most disappointing destination, the famous Las Ramblas promenade in Barcelona, Spain. The remainder of the Top 5 were also located in Europe: Dublin’s Temple Bar district came in third overall (with 687 reviews); the former Cold War border crossing of Checkpoint Charlie in Berlin, Germany, came in fourth (681 reviews); and Edinburgh’s famous cobblestoned Royal Mile came in fifth (539 reviews). BTW, what are the 10 Worst Tourist Traps in the U.S? Glad you asked. Once again Fisherman’s Wharf and Wall Drug came in first and second. Meanwhile, Graceland also crept in to the U.S. Top 10 tourist traps in ninth place, alongside the likes of Times Square, Chicago’s Navy Pier, and Seattle’s famous Pike Place Market. Oh, and don't forget the Dole Plantation in Hawaii (I've been there and actually it should be number #1).

FIX & FLIP WORKSHOP. Saturday, August 23, 2025, 9:00 am to 6:00 pm. (and bonus session on Sunday at an actual rehab.) Learn how to find, finance, fix, and flip houses. Los Angeles County Real Estate Investors Association, at the Iman Cultural Center, 3376 Motor Avenue, Los Angeles, CA 90034. The cost of the workshop is $349.00 per person. Gold members can attend for free. www.LARealEstateInvestors.com.

Vendors Expo Returns! Our world-famous "Vendors Expo" returns in 2025, on Thursday night, September 11, 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.

"You Go Girl." Both men and women invest in real estate. But honesty, women have certain “challenges” that men just don’t have to think about. (Men, you may have no clue what we’re referring to, but women know exactly.) So please join us at the Los Angeles County Real Estate Investors Association September meeting, Thursday night, September 11, 2025, 6:30 to 9:30 pm, where you will learn how to confront these challenges and become a successful real estate investor. This month we have a unique panel of four women who are kicking butt in Real Estate? These women have been in the trenches, confronted and conquered challenges, and know how to swing a hammer (though they’ve learned they don’t have to). And that’s what they will share with you. Their stories are as different as their personalities, but they all share two things in common: They are successful at what they do and they earn a good living doing it! Attend and learn what advantages women have when investing in real estate. (Men; you can attend too, but at your own risk.) This joint event with the Women's Real Estate Network ("WREN") is always our largest attended event of the year! Don't miss it!

This Week. Looking ahead, investors will continue to watch for additional information about tariffs and monitor comments from Fed officials for hints about monetary policy later in the year. It will be a very big week for economic reports with a focus on the housing sector. the NAHB report on housing will come out today. Housing Starts will be released Tuesday from the Commerce Department. On Thursday, the National Assocation of Realtors will release updated Existing Home Sales will come out Thursday.

Weekly Changes:

10-Year Treasuries: Flat 000 bps

Dow Jones average: Rose 800 points

NASDAQ: Rose 250 points

Calendar:

Monday (8/18): NAHB Housing

Tuesday (8/19): Housing Starts

Thursday (8/21): Existing Sales

For further information, comments, and questions:

Lloyd Segal

President

Los Angeles County Real Estate Investors Association

Lloyd@LARealEstateInvestors.com

www.LARealEstateInvestors.com

310-792-6404