Timely Real Estate News……………………………………………….. I February 2017
Snap, Inc., was a rebel from the start, spurning creature comforts of campus life found atApple, Google, and Facebook in Silicon Valley. Instead, the founders — Evan Spiegel and Bobby Murphy, chose Venice Beach, the edgy, by-the-sea enclave that has been more popular for its Muscle Beach and Board Walk than technology. This is exactly the environment they wanted for their out-of-the-box tech company — a place where they could embellish and further strengthen their creative and unique vision for their burgeoning social media company.
Because Venice Beach is, well, Venice Beach — large corporate campuses do not exist within its boundaries — but for the Snapchat founders, this was more intoxicating for their vision for wanting to stimulate the creativity amongst the best and brightest who were attracted to Snap Chat’s mobile messaging. It has taken the world by storm, and launches its multi-billion IPO this week (3/1) and is reportedly already sold out.
While their strategy was to purposely avoid the campus life so engrained in Silicon Valley and elsewhere, Snap soon spread its wings within the existing buildings available in Venice and nearby Marina del Rey. Their offices were scattered amongst a collection of homes, office buildings and warehouses, which the founders admit in their IPO, could serve as a detriment to future culture building and perhaps not stimulate innovation. (They had to write that stuff.) But when you understand that the founders believe they are creating a paradigm for the future, you can understand their thinking.
The company — a start-up whose founders are millennials who have targeted their own demographic— is young in every sense of the word. According to one corporate culture consultant, its employees probably live their lives on mobile devices, connect to friends and colleagues through digital networks and are accustomed to frequent chance encounters with new information via the Internet….”They have different expectations of how they navigate physical space.”
The current Snap Venice Beach model still is taking shape, but one possibility is “a campus that weaves together” several workspaces across a neighborhood or city — similar to urban college campuses such as New York University.
There is no question that Venice Beach serves as different creative platform other than the sprawling industrial parks of San Jose, Santa Clara, and Cupertino home to the world’s largest and most successful technology companies. But, it’s clear that Snap doesn’t mind being out of that loop. Venice Beach is after all, not Silicon Valley.
“It is going to be interesting to watch to see what the influx of more millennials working in “the area” do to the already high property values’, stated Carole Schiffer.
Nationally existing-home sales off to an interesting start in 2017
The National Association of Realtors reported existing-home sales stepped out to a fast start in2017, surpassing a recent cyclical high and increasing in January to the fastest pace in almost a decade. All major regions except for the Midwest saw sales gains last month.
Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, expanded 3.3% to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.51 million in December 2016. January’s sales pace is 3.8% higher than a year ago (5.48 million) and surpasses November 2016 (5.60 million) as the strongest since February 2007 (5.79 million).
“While these are national statistics,” Carole Schiffer said, “we are looking for any signs of home sales moving upward. We have seen prices move upward because of the lack of inventory, but the number of sales is on the somewhat soft side.”. Because of the lack of inventory, we are still seeing many multiple offers as buyers feel the need to take advantage of the interest rates, knowing of the possibility of increasing interest rates later this year”.
Lawrence Yun, NAR chief economist, says January’s sales gain signals resilience among consumers even in a rising interest rate environment. He stated that much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home. Market challenges, he noted, remain but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.
“However, it is important to note that the NAR report does not reflect what is happening in our neighborhoods on the Westside,” Carole Schiffer stated. “The market has slowed down significantly — prices are going up, but not inventory. We are now seeing a major increase in ‘for lease’ inventory because homeowners are reluctant to put up the homes for sale at this point.” “Those homes are being leased, but inventory is also increasing. This change in type of property will most likely impact the sales market as buyers cannot find what they want and either extend their current leases or lease out the market while searching for a home to purchase”.
Southern California posted strong improvement in pending home sales
The California Association of Realtors just released their February “pending home sales” index for California. This report is not about actual sales — only pending sales which means homes that have been put into the escrow pipeline.
According to the CAR, pending home sales in Southern California region posted a year-over-year improvement last month, rising 8.1% from January 2016 and increasing 10.5% on a monthly basis. Riverside County led the region in pending sales, posting a 16.2% increase from a year ago. Los Angeles, Orange, and San Diego counties also posted modest year-over-year increases of 7.1% 8.0%. and 4.0%, respectively. San Bernardino County was the only area within Southern California that saw pending sales lower on an annual basis by 2.8%.
Other regions in California suffered from the lack of inventory and fast-rising prices. San Francisco Bay Area as a whole dealt with tight housing supplies and low affordability which caused a fall in pending sales of 9.7% compared to January 2016.
All in all, one has to take a step back and see what is happening in your neighborhood, and as I reported in the February 15 SchifferLine, sales volume was down for January in the five communities I report on (Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood) by nearly 20%, and most of the recorded sales in January were actually made in December 2015. Yes, the increase in pending home sales is good to see, and we’ll give you a complete report in the next issue of the SchifferLine on March 15.
For Catalina, the drought is not over….
Despite what you read about California’s near-ending of its draught-like conditions, the 4,000 residents of Catalina Island are not included in this story. On Catalina Island, just off the Southern California coast, water scarcity is so severe that residents still rely almost entirely on a pair of desalination plants.
Catalina is home to population of 4,000 and a beach playground for roughly 1 million annual visitors. Residents and businesses have had to contend with mandatory water rationing since 2013. And while surrounded by ocean, the island has a major disadvantage to the rest of California: It can’t tap the melting Sierra Nevada snow that sustains mainland farms and cities during the warm months.
That’s why officials have tightly restricted the use of Catalina’s main water source: an aquifer connected to the interior Middle Ranch Reservoir. The drumbeat of winter storms has helped to replenish the reservoir, but as of last week, it was still only roughly a quarter full — and summer is looming.
Looking for dirty money…. real estate a good place to start
The U.S. Treasury Department is stepping up its search for criminals who seek tolaundermoney by buying U.S. real estate. The U.S. Treasury Department Financial Crimes Enforcement Network (Fin CEN) will extend for 180 days a rule ordering title insurance companies to report to authorities about some all-cash purchases in parts of California, Texas, Florida and New York, the agency said in a statement Thursday.
The order mandates that the title companies identify the real purchaser, even when the sale is made through shell companies. This program has been in effect since last Summer in Los Angeles County.
The information is “valuable data that is assisting law enforcement and is serving to inform our future efforts to address money laundering in the real estate sector,” said Fin CEN Acting Director Jamal El-Hindi. The agency said since imposing the original order in January 2016, it has found 30 percent of these cash real estate transactions involve a person who had previously been reported to authorities for suspicious financial activities. So, seller beware…make sure you thorough vet your buyer. Good advice from the Treasury Department.
Talk about going from the frying pan into the freezer!
This weekend I am going to Vancouver to visit my sister and her family to celebrate my birthday, and will leave the beautiful Los Angeles weather in the 80’s to snow! It has been a few years since I have been to Vancouver and I am very much looking forward to seeing how it has changed as well as visiting Vancouver Island and Victoria. I promise to share some photos upon my return.
In the meantime, I have been very busy working with both buyers and sellers, and showing my lovely least listing at 159 N. Thurston in Brentwood. It is a wonderful home with huge open spaces, tons of natural light, a great convenient location, privacy, and a fantastic garden/pool area. We are asking $11,500 a month for this 5 bedroom/4.5bathroom home.
Please do not forget to visit my web site… caroleschiffer.com, Caroleschiffer/realtor.com, www.facebook.com/CaroleSchifferRealtor, www.linkedin.com/incaroleschiffer, www.instagram.com/caroleschifferrealtor or @caroleschifferrealtor on your mobile
The Modern Luxury Datebook issue – Charity & Social – Los Angeles 2017 is out! For those of you who receive Angeleno via snail mail, this smaller publication is part of the magazine itself. For the rest of you, here is the link for you to see the fun cover and the individual articles on the 24 of us how are featured this year (my article is on page 26). http://www.modernluxury.com/modern-luxury-charity-social-datebook-los-angeles/digital-edition. I am very proud to be included in this austere group, and would love to hear your comments about the publication and the article.
COUNT ON CAROLE
Flexible? You can’t survive as a Realtor on the Westside unless you’re prepared to be flexible 24/7. Change is endemic in life – so unless you know when to bluff or fold….when to stand firm or give ground, many transactions will disintegrate when they don’t have to. Having a Realtor who knows when to be flexible and when not to be…counts.
Carole Schiffer. The Westside Expert