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Carole Schiffer

has been recognized as one of Coldwell Banker's Top 500 agents in the United States -- out of 41,000 agents nationwide according to Bruce Zipf, president and CEO of NRT, Coldwell Banker's parent company. "This is a tremendous honor," Carole stated, "and I am so proud to be a member of the Coldwell Banker family since 2000." Carole has always been one of Coldwell Banker's premier agents in their Brentwood Office. She specializes in the sale of luxury homes in West Los Angeles including gated communities. A dynamic, intensely dedicated agent, she is respected by peers and prides herself on providing the ultimate professional service and intimate real estate knowledge. .

About Carole Schiffer

Call Carole at (310) 442-1384

SchifferLine 15 October 2014

 Timely Real Estate News………………………………………………….15 October 2014

Economic slowdown sends jitters through Wall Street….Ebola doesn’t help
One sage in the Wall Street Journal made the point that the market is first driven by emotional response to an event and then it becomes more rational as they sift through the facts. The economic slowdown in Europe and elsewhere is causing Wall jitters_15_October_2014Street to have concerns about our own recovery, even though some leading bankers are ‘banking’ on our economy being somewhat insulated from outside influences. And then there is the Ebola scare, which is causing fears among many and questioning our ability to manage our own healthcare system in times of crisis. Needless to say, this is a “wait-and-see” time for us in real estate. I certainly do not present myself as an economist, merely an observer and an obvious participant in how the economy both local and worldwide impacts us. Also with the Federal Reserve plans to end their policy of Quantitve Easing, which has keep interest rates low at the end of the month we are seeing a volatility in the stock market. Right now, we do not see any harmful effects caused by Europe’s slowdown or Ebola on mortgage financing, sales or home prices (see stories below), but honestly it is too early to tell. When these external events affect our real estate market, I will be covering these in The SchifferLine. Thank you!

The real estate market is sending more ‘treats’ than ‘tricks’. Happy Halloween!
It’s about time we are seeing good signs across the board in Southern California’s real estate market. You might call this the “Halloween Effect” — treats are coming all dressed up as positive gains throughout all of the six counties according to Core Logic Data Quick, where sales grew 1.2% compared with the previous year. And while home prices were moderate, you will see below that home prices in the five communities I report on — Beverly Hills, BH Post Office, Bel-Air, Westwood/Century City and Brentwood — were all up for the year, and substantially so.Trick_or_Treat_15_October_2014 copy

According to Core Logic, it’s the latest sign of a housing market that’s reaching equilibrium after years of big swings. Real estate agents and other market watchers this past summer have reported growing inventory, price cuts and a shift in the market toward so-called “regular” buyers, instead of the flood of investors and cash-only purchasers who drove up prices last year.

“Today’s home shoppers are more likely to find a less-crowded market with fewer intense multiple-offer situations and more serious, realistic sellers,” said Core Logic analyst Andrew LePage.

The cooler price growth may have helped boost sales across the region. The number of sales grew between August and September, and notched their first year-over-year gain in 12 months. Economists have said that higher prices and strict lending guidelines have dampened home sales this year, but predict sales could rise if incomes start to improve.
I know it’s not Halloween yet…but it’s coming to a neighborhood near you (Friday, October 31). If you visit my Facebook page, you’ll learn why Halloween is a very popular event (not a national holiday yet) with retailers.

Sales activity remains strong, healthy while prices thru September are rising....
I want to share with you the #s we have through the first nine months of 2014 — demonstrating again that the real estate market in the communities I report on are performing well and ahead of last year. Let’s look at sales activity (volume).

Through September 30, sales activity for these nine months generated over $2.379 billion compared to $2.124 billion in 2013 for the same period. That’s a 12% increase, which is 20% ahead of last month’s figure of the first eight months. Yes, our home prices are still down by as much as 20% (or larger depending on where you live) on pre-recession prices in 2007, but price_analysis_15_October_2014we are steadily crawling our way back to reclaim much of the equity lost for the past seven years. We’re getting there.

For example, year-to-date Median Sales Prices (MSP) for Beverly Hills is 5% ahead of the similar nine-month period in 2013….that’s not much, you might say, but when you consider that the median sales price for a home in Beverly Hills is now nearly $4.8 million, a far cry from two or three years ago when it was in the mid-$threes. Beverly Hills Post Office is now 18% ahead of last year in median sales prices — at $2.072 million….Bel-Air is 21% ahead of the previous year at $2.291 million. Westwood/Century City, while a lower-priced area than the other four communities, was still 21% beyond 2013 for the first nine months; and Brentwood, which is having a banner year in sales activity, is 17% ahead.

In doing our analytics on the current pricing and sales activity, what is astounding to see are the monthly price increases in MSP in these communities. Beverly Hills Post Office was 91% ahead of pricing in 2013 for the same month (September 2013)….Bel-Air was 73% ahead of 2013, another strong performance….Brentwood was up 37% over 2013′s September, and Westwood/CC was up 21%. Only Beverly Hills was down — 1% — a minor fluctuation when you consider that they have had some rather large transactions that have, over time, influenced the median sales prices.

The trend line for 2014 continues upward — in pricing and in sales activity. We are our own “little market” on the Westside, and while the Core Logics of the world speak about Southern California and Los Angeles County — citing increases here, there — the reality is that the only really important #s you need to focus on each month is what is happening in your ‘neck of the woods’, as Al Roker would tell you on the Today Show. And today’s show is that the Westside communities are showing their strength in the numbers so far this year.

There are some details about how each area is doing in terms of comparing the sales price (SP) to the original listing price (OLP). In many ways, this reflects several critical components — for example, a home that is overpriced or “has issues”, but eventually sells, will show an abnormal amount of “days on the market” and that will be directly reflected in lower selling price. The longer the time on the market, the bigger the discount to get the property sold, and that days on the market count impacts the general numbers for days on market for all of the properties in the area!.hot_market_15_October_2014

Where you have a “hot” market — where homes are selling — on the average — sometimes for more than the listed price, you will see the SP/OLP ratio over a 100 — and that occurred in Westwood/Century City last month, where the ratio was 100.3.  The biggest difference in last month’s MLS report showed that Bel-Air had a SP/OLP ratio of 88, one of the lowest in recent months.

In summary, the five communities I cover each month remain solid in terms of pricing and sales activity. We continue to see strong activity at open houses. At the Monday morning sales meetings in my Coldwell Banker Brentwood office, we always analyze what is happening and trending in the market..because at the end of the day.. what is the “real” story is what is happening in the trenches… Here are my personal experiences. I am currently working with two buyers, both of whom are strong, highly motivated buyers: One for a condo in Brentwood, and the other for a home in Santa Monica/Venice. In both cases, we have lost properties in multiple offers with them selling in one case $100,000 over asking and only having been on the market less than a week. Fortunately, we just entered into escrow on a great condo here in Brentwood, and while we were at the property doing our inspections, the listing agent was fielding calls from other agents wanting to show the property to their clients!

Rents are going up in LA…and that may be time to invest in income property
Renters are going to be paying more for housing according to USC. The average cost of an apartment in the region is projected to grow more than 8% over the next two years, according to a new report out Tuesday, making one of the nation’s least affordable rental markets even less so.

So, my thought, if that’s the case, why not look at rental properties for your next investment? I am not talking about apt buildings, but also smaller homes and condos.. They too could be good investments.

The figures come from a USC study that projects average rents by mid-2016 in Los Angeles County will have climbed 8.2% to $1,857, 8.6% to $1,807 in Orange County and 9.9% to $1,189 in the Inland Empire. “We think rents are going to go up everywhere. There isn’t remotely enough supply. We’ve never had a situation like this before in Southern California,” stated Richard Green, director of USC’s Lusk Center for Real Estate.

For RentThose growth rates — each of which on an annual basis is faster than was recorded over the last 12 months — reflect surging demand for rentals, a trend that shows no signs of slowing. The region has long had a shortage of rental housing. A study earlier this year estimated Los Angeles County needs an additional 500,000 apartments or rental units to meet demand, which is surging as job growth picks up and a wave of twenty somethings move out on their own. Meanwhile, income, especially for working-class households and other likely renters, is flat at best. And apartment construction, although increasing, is nowhere close to keeping up with demand.

“Vacancy rates are not going anywhere,” said Green, who projected the rate in Los Angeles County, would actually fall from 3.3% today to 2.9% in mid-2016.

The cost of housing is becoming a long-term economic problem for Southern California, said Daryl Carter, chief executive of Avanath Capital Management, an Irvine-based investment firm that owns $300 million worth of apartment buildings nationwide. And it’s a problem that could feed on itself by pushing good jobs elsewhere.

He pointed to corporate decisions like Tesla Motors’ move last month to open a $5-billion battery factory in Nevada instead of California, and noted that they’re not just driven by incentives and cheap industrial land, but also by housing costs.

Here’s an interesting story….comparing your loan application turndown to Ben Bernanke’s turndown!
As reported recently in the press, a couple’s recent rejection of an application for refinancing their home loan was similar to the former Federal Reserve Chairman Ben S. Bernanke’s turndown – both lost their re-fi application because of a recent history of inconsistent income. The current tight mortgage market standards and how lenders scrutinize applicants’ incomes is illustrated in how lenders look at “consistent income”. In essence, both the aforementioned couple and the former Fed Chairman are going through a period where their monthly incomes were fluctuating despite strong financial history.

I found this story to be a familiar one as we have seen credit tightening serving more like a noose around a buyer’s neck than a safety rope for homebuyers seeking a loan. This holds true for prospective buyers applying for purchase money loans as well as re-financing. Banks today continue to ask for documentation upon documentation and then ask for more. Sometimes it feels like “Chinese Water Torture”!. Just when you think you have loan approval, there is one more portion of documentation that they are looking for.

At the very least, there are lessons for anybody who can’t document months of steady, predictable income, whether from salary, regular retirement fund drawdowns, other sources or expenses like divorce settlements, business loans, etc.

But, like Bernanke, they couldn’t get through the refi application hoops, even though their lender, Quicken Loans, solicited them to apply. Ditto for a term extension on their home equity credit line from Bank of America, which also solicited their application.

The rationale for rejection from both lenders: The couples’ sporadic drawdowns from their IRA could not be added to calculations of their qualifying monthly income. As a Quicken Loans official said in a letter to them after their complaint to the federal Consumer Financial Protection Bureau, the couple could not show “consistent monthly draws from the IRA account.” This creates debt-to-income ratio problems, the Quicken letter said, because for income from retirement accounts to qualify, there must be “verification of regular receipt of drawdown income for two months, and verification that the payments will continue for three years.”loan_application_turn_down_15_Oct._2014

Other lenders would require similar verifications, the Quicken official noted, and indeed, Bank of America’s letter to the couple said their “validated income” was not sufficient to “support the level of your monthly debt.” As has been mentioned in previous Schiffer Lines banks take a very hard look at a potential borrowers’ ratio, and if they are off, the loan application moves into the turn down file rather than the approved file. I recently had a case where one of the buyers was an ER doctor, and was incorporated and under contract as an ER doctor to a local hospital. His wife, a dentist was a stay at home mom.Because the Father was incorporated, and wrote off a number of his expenses, his ratios where way off, and at the end of the day, the only way we got loan approval was for him to turn in his leased car and share the only family car with his wife!

Lenders have some wiggle room on granting credit when an applicant has lots of money invested in stocks and bonds and doesn’t want to liquidate them on a regular basis. For example, Freddie Mac allows lenders to “annuitize” applicants’ retirement fund assets, turning untapped IRA and 401(k) wealth into “income” that helps them qualify for a mortgage.


home_buglaries_15_October_2014On a serious note, lately we have seen incidences of robberies at open houses on the Westside. Please be careful and lock up all of your valuable items, jewelry, small knick knacks that can be “easily palmed or picked up”, and unfortunately medicines. The LAPD has photos of the individuals that are involved in these crimes, but have yet to find them! Looking forward to speaking with you soon.

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