Hello March

Hi Friends,

I don’t know about you, but I can’t wait to get back to normal LA weather. We have seen record rainfall as well as low temps and the snow on the mountains has been picture perfect, but I’m ready for warmer weather.

Over the past few days we have seen some major shifts in the market. Just a few days ago we saw SVB the 16th largest bank in the US collapse. It sent people into a panic and caused other banks to take action. What does this mean? We still do not know yet, but one thing we have seen as of late is that home interest rates have started to drop. This could only be temporary, but for many home buyers this could be the perfect opportunity to lock in a low rate.

If you are thinking of buying or selling a property, I would love to help. I am always here to answer any questions you may have.

Check out Barronestates.com for more information on selling, purchasing or leasing your next home.

I will do my best to assist and educate you in finding your place called “Home, Sweet Home” for now or at last!!

Warmest Regards,

Oriana

I am humbled and excited to announce I was awarded the Coldwell Banker Realty International Sterling Society Award for outstanding production in 2022. Thank You to all my clients, colleagues, management, family and friends for all your endless love & support. This truly means the world to me.

It’s never a good sign when “bank collapse” is trending on Twitter.

Such was the case Monday as investors pummeled shares of First Republic Bank and Western Alliance Bancorporation, among several other regional financial institutions. Evidently, they feared that these banks would suffer the same fate as Silicon Valley Bank in Santa Clara, Calif., which was taken over Friday by the Federal Deposit Insurance Corp., and Signature Bank in New York City, which was shut down Sunday by state regulators.

The rapid rise in interest rates has been a challenge for banks in general, reducing the value of some of their safest investments. But banking experts say the circumstances that toppled Silicon Valley Bank and Signature Bank were so unique, and the response from the federal government Monday so aggressive, that depositors in other banks can stay put rather than shifting into crisis mode.

Besides, at least part of the doomsayer wing on Twitter appeared to have a rooting interest in a wider collapse. Some were conservative critics of the Biden administration, but others were business executives eager for the government to protect their uninsured deposits (which the feds eventually did).

Republican entrepreneur Vivek Ramaswamy (who is running a long-shot presidential campaign) tweeted Sunday that venture capitalists and startup executives who stood to lose their deposits at Silicon Valley Bank “are going *out of their way* to push a narrative that there’ll be a bank run on Monday if SVB depositors aren’t bailed out by the government. They’re yelling fire in the proverbial theater, hoping that everyone runs and knocks down a candle on their way out — actually starting a fire that may not otherwise have existed.”

Here’s what you need to know about the latest developments and what the best course for you may be going forward.

Is my money safe in the bank?

Regardless of how resilient or fragile your bank may be, the answer will be yes for an overwhelming number of people. That’s because federal insurance programs will protect all the money typical Californians have squirreled away in a bank or credit union.

For each depositor, the FDIC ordinarily insures a total of $250,000 in checking, savings, certificates of deposit and money market accounts at participating institutions. (The vast majority of banks are insured; you can confirm whether your bank is by checking this directory at FDIC.gov.) The FDIC’s limit applies to each bank where you do business, so if you have $250,000 at Bank A, $150,000 at Bank B and $300,000 at Bank C, all but $50,000 at Bank C would be automatically insured.

By way of comparison, the median amount that Americans have in banks is $5,300 per household, according to the latest Federal Reserve survey (from 2019). The average amount is $41,600. So for all but a small percentage of borrowers, the FDIC’s $250,000 figure is an aspiration, not a limit.

Credit unions have a similar insurance program from the National Credit Union Administration, with the same $250,000 limit.

For businesses with large payrolls, however, $250,000 can be a real issue. The federal takeover of Silicon Valley Bank on Friday, which temporarily cut off customers’ access to their funds and jeopardized amounts over $250,000, came just as some companies were about to cover the cost of their bimonthly paychecks. That’s one of the reasons the Biden administration announced Sunday that it was waiving the $250,000 limit and giving customers of the two failed banks access to all the money they’d deposited.

The point, according to a joint statement from the Fed, the FDIC and the Treasury Department, was to send a message that strengthens public confidence in the banking system and discourages more bank runs. And that message should be effective, said Jeffrey Ball, the chief executive of the Orange County Business Council and the founder and former CEO of Friendly Hills Bank in Whittier.

Now, Ball said, businesses don’t need to make any preemptive moves with their deposits at other banks. “I think the precedent that was set … should give you confidence that you will be able to access your operating funds going forward,” Ball said.

Economist Joseph E. Gagnon, a senior fellow at the Peterson Institute for International Economics, was not so sanguine. “If you have uninsured deposits, you might want to think about the health of your bank. But you’re probably feeling that’s less urgent now,” he said. “You probably think this precedent the administration has set is going to protect you. … [But] anyone who has uninsured deposits should certainly think about this.”

Is this another bailout like the one in 2008-09?

At this point, no.

Both banks have investments and other assets that may be substantial enough to cover the withdrawals made by their depositors. According to the FDIC, those depositors are first in line to be made whole; if there’s anything left, it will go first to secured creditors (i.e., companies that billed the bank for services that haven’t been paid for yet), then to investors who purchased the banks’ bonds, and finally to investors who hold the banks’ stock.

If the assets don’t generate enough money to cover all the deposits, the FDIC will have to cover the costs it incurs by charging banks a special assessment. As with any other insurance program, the banks carrying the insurance are the ones that pay for it.

The banks’ customers and investors, not taxpayers, ultimately pay for deposit insurance through higher fees, lower interest payments and reduced returns. That may be a distinction without a difference, however, Gagnon said. Just about everyone who’s a taxpayer has a bank account, he said, and the cost of the latest rescue is “going to be paid for by just about anybody that has a bank account.”

Why did Silicon Valley Bank fail?

In the Great Recession, banks nearly failed because their investments in housing-related securities plunged in value after the housing market crashed. This time, the problem wasn’t risky investments, but rather a mismatch between longer-term investments and short-term demands for cash by depositors.

Donald P. Johnson, vice chairman of the American Business Bank board, said SVB and Signature were victims of a sharply changed banking landscape. Long years of low interest rate targets set by the Federal Reserve and tepid economic growth reduced the demand for bank loans, prompting banks to put more of their deposits into longer-term Treasury bills and municipal bonds in search of higher returns, he said.

When the Fed drove up interest rates sharply in the last year to fight inflation, the value of those bonds dropped. So when Silicon Valley Bank had to sell some of those bonds to raise cash, Johnson said, it took a hefty loss, which helped push down its stock price and fed concerns about the bank’s health.

That, in turn, triggered a number of tech companies with huge accounts at the bank to rush for the exits Thursday — spurred in part by their venture capitalist backers — resulting in an astounding $42 billion worth of withdrawals Thursday. Regulators stepped in after that, worried that the bank wouldn’t be able to meet the immediate demand for cash.

Gagnon said he was surprised that the bank examiners supervising Silicon Valley Bank allowed the problem to develop as it did. “This is a very obvious risk they were taking on,” he said, referring to the long-term investments. “It was an enormous part of their balance sheet. … I would be surprised if a lot of other banks would have this issue. It’s like Banking 101, don’t do too much of this.”

One possible explanation, he said, was the bank’s unusual reliance on depositors with huge accounts. Depositors with relatively small accounts don’t generally pull out their money and search for higher rates when interest rates go up, Gagnon said, so having a mismatch between a bank’s long-term investments and short-term deposits isn’t a big deal. But Silicon Valley Bank didn’t have the luxury of customers who would stick around no matter what.

The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted in the wake of the subprime loan fiasco, required regulators to test banks with more than $50 billion in assets to see whether they could withstand certain types of stressful events, such as a sharp rise in interest rates. That’s the sort of test that would have detected the problems faced by Silicon Valley Bank, Gagnon said. But Congress passed and President Trump signed a bill in 2018 raising the threshold to $250 billion, a change that exempted Silicon Valley Bank from the extra scrutiny.

The Fed said Monday that it would review the “supervision and regulation” of Silicon Valley Bank “in light of its failure.”

When Silicon Valley Bank went down, Signature Bank experienced a similar run of withdrawals from customers with large amounts of uninsured deposits. This bank also had accepted cryptocurrency deposits, but it’s not clear what role that played in its troubles. One factor for both banks, Johnson said, was that they had expanded aggressively — too aggressively, he said.

Critics say that both banks failed to manage the risks posed by inflation, which started well before the Fed raised rates. Johnson agreed but said the bottom line was the public’s view of the banks. “The perception of whether a bank is good or bad makes a difference as to whether it’s going to make it or not,” he said.

Stephen Jackson lost out on more than a dozen properties as home prices surged during the pandemic housing boom. He finally called off his search in 2021 when someone outbid him for a Tarzana condo by $25,000 — and paid in cash.

“I was like, ‘I am never going to get a freaking home here,’” the 31-year-old human resources manager said.

Last year, mortgage rates exploded, making the sky-high prices even less affordable and tanking home sales.

When his roommate decided to move in October, Jackson chose to look again, this time seeking deals swirling in the crosscurrents of the real estate fallout.

Last month, he made an offer on a two-bedroom condo in downtown L.A. that had languished on the market for 72 days. At $20,000 below the $450,000 list price, his offer — the only one — was accepted.

“All my friends were shocked I bought a home right now, and I was like, ‘Why wouldn’t you?’” Jackson said.

Demand for homes is a far cry from the height of the pandemic housing boom, but Southern California real estate agents and mortgage brokers say they’ve been seeing more people like Jackson dip their toes into the market to take advantage of momentary opportunities.

Mortgage rates — though elevated — have come off their 7% highs, and home prices have fallen as sellers struggled to get offers.

In L.A. County during the four weeks ended Feb. 5, the number of signed purchase contracts was 42% below the same period last year, according to data from real estate brokerage Redfin. Still, that’s an improvement from the 51% drop seen at the start of December.

“The temperature in the room is still cold,” said Taylor Marr, an economist with Redfin. “But it’s not frozen.”

Whether the modest rebound will hold is unclear. Returning buyers may need to rapidly adjust what they can afford.

In the past two weeks , mortgage rates — heavily influenced by inflation — have resumed their climb following economic reports indicating that inflation will be tougher to bring down than expected.

The average on a 30-year fixed mortgage climbed to 6.32% for the week ended Wednesday, up from 6.09% two weeks earlier, according to Freddie Mac, the government-backed mortgage buyer. A daily tracker from industry publication Mortgage News Daily puts the average even higher: 6.8% as of Friday.

One mortgage broker said he noticed a “huge drop-off” in demand as rates rose last week, while other brokers and real estate agents said they’ve seen buyers plow ahead undeterred.

For would-be buyers putting down 20%, the monthly mortgage payment on a $800,000 house would be about $100 more expensive with an interest rate of 6.32% than with 6.09%. But the payment at 6.32% is $322 less than at 7.08%, which is where rates topped out in the fall, according to Freddie Mac.

Falling home prices help offset some of the pain from high rates.

Overall, L.A. County home prices have fallen 3% to 14% since the peak in pricing last year, according to a review of various platforms that track prices in different ways. Additionally, with less competition, sellers are more likely to pay for repairs or cover a buyer’s closing costs. Some will buy down a buyer’s interest rate.

Tressa Pope, founder of TPG Mortgage Lending in Burbank, said people using down payment assistance programs have also had luck. When competition was fierce, sellers often refused to consider those buyers, because they feared paperwork would bog down the deals.

Not everyone can, or wants to, jump in the market now.

Dana Robinson, a 46-year-old freelance writer, and Scott Rowden, a 44-year-old video editor, rent a Sherman Oaks apartment and want to buy a house in the neighborhood to build equity and give their 2-year-old daughter a backyard.

But with nearby houses typically listed above $1.5 million, the dream is out of reach. The couple hopes to start looking late this summer or early fall. By then, prices ideally will have fallen enough so they can stretch their budget to buy.

“If not, then we will push it back,” Robinson said.

Such continued affordability challenges are a major reason some experts predict Southern California home prices have further to fall.

Though mortgage rates have dropped from 7%, they remain above 6% — roughly double the level that helped drive home prices to all-time highs.

“Affordability still looks really bad at 6%,” said Rick Palacios Jr., research director with John Burns Real Estate Consulting.

The consultancy expects rates to average around 6% for the remainder of 2023. By year’s end, it predicts, L.A. County home prices will have dropped percentage-wise by the “high-single digits” compared with December 2022 — a moment when the company’s home price index had already recorded a 5% drop from the peak.

Jeff Tucker, a Zillow economist, said it’s possible home prices have already found a bottom. Inventory is very low, and a modest increase in demand could be enough to send prices back up, he said.

On the other hand, higher mortgage rates could squash what was a modest rebound.

During the week ended Feb. 10, U.S. mortgage applications — precursors to home sales — dropped compared from the prior week as rates rose, according to the latest data from the Mortgage Bankers Assn.

“Potential buyers remain quite sensitive,” Joel Kan, an economist with the Mortgage Bankers Assn., said in a news release announcing the data.

Given the uncertainty, would-be home buyers have much to ponder. If they buy now and prices keep falling, they might not have enough equity to sell and could be vulnerable to a foreclosure if they lose their jobs.

Jeff Lazerson, president of Mortgage Grader in Laguna Niguel, said he thinks buyer skittishness is why many deals fall apart in escrow.

“They are worried,” Lazerson said of buyers. “It’s, ‘If I wait six months, will the price be lower?’”

St. Patrick’s Day is Friday, March 17th, 2023

St. Patrick’s Day in Los Angeles takes a little bit of planning—as far as drinking holidays in a car-centric city go—but with our guide, you’ll be toasting the Irish in no time. Find the best Irish pubs in Los Angeles with Guinness pours that are up to scratch, and the crispiest fish and chips this side of the pond. From parades and family-friendly activities to parties at bars and concerts, there are all kind of events. If all else fails and you just can’t handle all that green beer, might we suggest a dram of Irish whiskey at one of the best whiskey bars in town? Sláinte!

St. Patrick’s Day events and things to do…

Small squid had been stuffed with rice and suspended in glossy tomato-pepper sauce spiced with clove and bay leaf. Sardines in pepper olive oil were paired with piquillo peppers or spritzed with lemon or hot sauce before canning. A few threads of seaweed among pickled mussels reinforced the flavors of the Galician coastline where the mollusks were harvested. In a simple brine, razor clams maintained their yielding chew and mild, distinct salinity.

A meal at Saltie Girl in Boston five years ago was a lightbulb moment in my appreciation of conservas, the tinned seafood tradition from Spain and Portugal preserved with a level of care that rockets their straight-from-the-container pleasure far beyond Chicken of the Sea basicness.

Appetizer spreads highlighting a featured tin of fish or shellfish with good bread and butter had been showing up more on menus across the United States over the last decade. The choices at Saltie Girl, which opened in Boston’s moneyed Back Bay neighborhood in mid-2016, numbered in the dozens. I hadn’t grasped before how much variety existed among conservas. The restaurant also served a dizzying selection of seafood towers, New York-style smoked fish, crudo, pastas, fried clams and toasts covered in things like uni or snow crab. I stayed intent on the tins, veering away only for a warm, butter-drizzled lobster roll as a rich finale.

Conservas and lobster rolls are also the marquee draws at the small, impeccably designed outpost of Saltie Girl that arrived on the Sunset Strip in December. Though its menu zigzags as broadly as the one at the original location, zero in on the tins and the New England specialties to understand why prime-time reservations are constantly booked — and how the restaurant instantly became a standout dining option around Sunset Plaza.

Quality tinned seafood isn’t as much of a novelty in Los Angeles these days. During the darkest days of the 2020 quarantines, fancier markets and restaurants-turned-grocers stocked up on beautifully packaged conservas as a pantry-stable shelf item; plenty of us took solace in yanking the metal tab on a tin — relishing the satisfying pop and scrape — and consuming the contents as a no-thought-required solo lunch. (Tins are also excellent in earthquake-preparedness kits.) As the world reopened, cozy new hangouts like Bar Moruno in Silver Lake and Kippered near Grand Central Market downtown laid out beautiful conserva spreads alongside glasses of herbal vermouth or sparkling wine.

Saltie Girl charges into the arena with a collection of more than 100 conservas divided into 17 categories of fish and shellfish. It’s a little overwhelming to absorb, and the per-tin prices stretch from the teens to a $63 splurge for delicate grilled branzino.

Beyond basic preferences — for example, does yellowfin tuna appeal over mackerel? — I tend to choose a couple of tins that emphasize contrast. Something straightforward like sardines in olive oil, or silvery needlefish for a close variation, sets a benchmark. They have the classic mellowed fishiness, and they taste ideal slightly mashed into buttered bread with a sprinkle of salt and maybe a dollop of piquillo pepper relish, all of which are part of the presentation.

Juxtapose them with a more distinctly flavored option: smoked oysters, Norwegian mussels marinated in dill and fennel, hake in salsa verde, white anchovies in roasted garlic, or the brined razor clams that are as umami-packed as I remembered.
With a martini or a shochu-gin-cucumber cocktail at the bar, tins could comprise the whole meal. I mean, yes, you also want a lobster roll. The cold version, with the lobster meat lightly dressed in mayonnaise, arguably best evokes Maine’s fleeting summer, but I still prefer the warmed buttery version loaded into a toasted bun.

Saltie Girl feels calibrated for indulgence, which is one way it differentiates itself from Connie & Ted’s, the modern institution a mile away that also happens to be a West Hollywood restaurant specializing in East Coast-style seafood. Connie & Ted’s is rambling and rowdy and serves chowder samplers, fish and chips, herb-crusted Rhode Island monkfish and its own great lobster roll. Saltie Girl is compact and elegant. The wraparound patio’s languid appeal defies its location on a chaotic and ultra-sceney stretch of Sunset Boulevard. Inside the aesthetic oozes an Art Deco yacht vibe. Note the wooden statues of mermaids affixed to the bar; they’re reclaimed boat figureheads and a signature touch of owner Kathy Sidell, who also recently launched the third Saltie Girl in London.

With so much homegrown talent to cover in Los Angeles, I don’t often race to imported restaurant concepts. But the breadth of the restaurant’s tinned seafood program initially pulled me in, and several top-notch dishes overseen by executive chef Kyle McClelland keep me returning. Oysters and other starter seafood options — including shrimp cocktail and cold Jonah crab claws that match the mood of the place — have been pared down to a mercifully short list and prepared with minimal fuss. Spicy lobster spaghetti is a feel-good heap of tomato, basil and fried garlic that doesn’t overpower the star ingredient.

A pile of Parmesan-dusted fries crowns a bowl full of mussels steamed in white wine and butter; it’s one of those timeless combinations into which I disappear until nothing is left. Same for the chewy-crisp fried clams that need nothing more than tartar sauce and a wedge of lemon.

The kitchen could honestly halve the menu without losing the soul of its premise. Escargots, steak tartare, whole fried black bass scented with ginger and soy and the $249 Wagyu tomahawk rib-eye push meals in Continental or steakhouse directions and strike me as overkill. Some concoctions — I’m thinking specifically of an uni-on-toast situation punctuated with black sesame, shiso, lardo and fried garlic — over-earnestly check boxes for ingredients that shout “Los Angeles.” It isn’t necessary. We’re here for a righteous lobster roll, not an excessively precious, $34 cylinder of King crab and avocado rolled in soy paper.

One foray into culinary California that would be welcome? A few more seasonal vegetable dishes to lighten the blitz of richness and, wonderful as the tinned seafood is, weave in more freshness. Saltie Girl did turn up in winter, so fried Brussels sprouts and well-trodden salad ideas like beets with yogurt or radicchio with blue cheese and walnuts make sense, but our farmers markets are showing early signs of spring; I hope the kitchen takes inspiration duly. Pastry chef and actor Ben Sidell, Kathy’s son, crafts the pastry program. Currently he makes an olive oil cake that he covers with beautifully suprêmed blood orange segments that make an endearing of-the-moment statement. It’s a strong finish and a good start.

Saltie Girl

8615 Sunset Blvd., West Hollywood, saltiegirl.com

Prices: Most tinned seafood $14-$63, small plates and starters $14-$34, most large plates $26-$48, smoked fish plates $20-$30.

Details: 5-11 p.m. Tuesday-Wednesday, 5 p.m.-1 a.m. Thursday-Friday, 11 a.m.-3 p.m. and 5 p.m.-1 p.m. Saturday, 11 a.m.-3 p.m. and 5-9 p.m. Sunday. Full bar. Lot and street parking.

Recommended dishes: Tinned seafood, warm lobster roll, spicy lobster spaghetti, moules frites.

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