Timely Real Estate News…………………………………….15 August 2016
“Some like it hot.” I don’t.
I’m heading to the annual Tom Ferry Success Summit in Las Vegas where the world’s elite real estate agents (6000!) gather to soak up wisdom, handy hints, and do some serious networking. We are bonding and learning over three days at the Mandalay Bay resort, August 17-19. But while some do like it hot, I definitely do not! Nope, I’ll be very comfortable and satisfied in the air-conditioned Resort, shops, meeting rooms and restaurants. I have been a client of Tom Ferry’s for over seven years, and he’s such an inspiration and notable expert on how we can better serve our clients. He’s the best. And yes, he’s hot, too.
Place your bets: OK, here’s the deal. If you want me to place a bet for you at the Mandalay resort while I am there…here’s what you do: Send me an email by Friday noon, August 19, and give me your wager choice….slots only please. Email me at email@example.com. I’ll re-confirm by return email. If you win, you keep all the $$. If you lose…well, you lose, and so do I as I am fronting the money! I feel lucky.
The more things change….the more they stay….
Every time I start to write The SchifferLine, I sit back and look at what’s hot, what’s not. Are there any notable trends I can report to you? Well, yes there are: It’s newsworthy that median sales prices are up in four of the five communities I report on (Beverly Hills, Beverly Hills Post Office, Bel-Air, Westwood/Century City, Brentwood), and overall sales volume is improving, but still not even for the year. We are still behind last year, — but not by much.
The entire nation continues to deal with a lack of inventory, and we are no exception in West Los Angeles or Los Angeles for that matter. Sales volume through the first seven months of 2016 is $1.881 billion vs. $1.971 billion through same period 2015. That’s a mere 4.5% shortfall, but we have been there before (behind), and I’m confident we’ll catch up by year’s end, which we did last year when we ended up $50 million to the good. If we had more properties for sale, we would have more volume…it’s that simple.
In the southwestern Westside region of Venice, Playa del Rey and Playa Vista, sales for the year through August was $274 million vs. $263 million, a 2% increase. The biggest jump was in the Playa Vista area and Westchester was/is not that far behind. The entire area benefits from the burgeoning Silicon Beach activity.
Median sales prices are strong….For the most part, sellers are seeing solid prices for their homes. Beverly Hills Post Office, had a median sales price through July 2016 of $2.992 million, a 29% increase over the previous period in 2015. Westwood/Century City was up 16% for the year at $1.880 million; Beverly Hills was up a moderate 4% at $5,355 million, and Brentwood is even with last year at $2.760 million. Only Bel-Air was down — 5% at $2.300 million as of the first 8 months of the year.
Median sales prices for the year for Venice was up 3%, but down 14% for Playa del Rey and down 6% for Playa Vista. “The unevenness of sales performance throughout the Westside continues,” Carole Schiffer stated…”so it really is a matter of the vagaries of your neighborhood that shows up in our real estate stats every month.”
Comparing median sales prices for July 2016 vs. July 2015, shows there are true signs of life occurring….for example, Bel-Air was up 43% over median sales prices in July 2016 compared to same month in 2015….Beverly Hills Post Office was up 32%, and Brentwood was up a whopping 70% last month compared to August 2015. Westwood/Century City was up 4%, and Beverly Hills was up 17% compared to last year at this time. “All of the communities I report on have shown real strength in pricing compared to a year ago this past month,” Carole Schiffer said.
Good news — home prices projecting upward; Bad news — affordability takes a hit. Good news — mortgage rates low.
The National Association of Realtors released its latest quarterly report showing that the median existing single-family home price increased by 83 % of measured markets, with 148 out of 178 metropolitan statistical areas showing gains based on closed sales in the second quarter compared with the second quarter of 2015. Twenty-nine areas (16 %) recorded lower median prices from a year earlier.
According to the NAR, there were slightly fewer rising markets in the second quarter compared to the first three months of this year, when price gains were recorded in 87 % of metro areas. Twenty-five metro areas in the second quarter (14%) experienced double-digit increases – a small decrease from the 28 metro areas in the first quarter. A year ago, 34 metro areas (19 %) experienced double-digit price gains.
What is happening is that the faster homes sell, the inventory also drops correspondingly, which continues to drive up prices according to Lawrence Yun, NAR’s chief economist. It appears to be a vicious circle.
Yun stated that steadily improving local job markets and mortgage rates teetering close to all-time lows brought buyers out in force in many large and middle-tier cities. However he noted with homebuilding activity still failing to keep up with demand and not enough current homeowners putting their home up for sale, prices continued their strong ascent – and in many markets at a rate well above income growth.
For the first time ever, NAR reported that a metro area/region topped $1 million for median sales price. Guess who? Silicon Valley’s own San Jose. No surprise here. Prices have been crazy up there for years …
What we are seeing in the local market, as reported in the last SchifferLine, buyers who can’t afford to enter the home buying cycle now, are opting to leasing apartments springingup all over Los Angeles…with developers offering everything from a free month’s rent to free parking for a year to lure tenants in this very active market Carole Schiffer said. Home building, according to the NAR, is languishing everywhere, and Yun points out there is simply not enough inventory needed.
What 55-plus buyers want in a home…. OK, boomers, listen up: New research shows that for boomers, it’s all about location, lifestyle and open space. Here’s what a focus group and survey discovered:
* The results showed that 55-plus homebuyers value amenities, community, flexibility, design — and locations that put them close to all the action. Although tradition says that many boomers are looking to downsize, the largest percentage of those surveyed indicated their preference for a mid-sized house.
* In the research conducted by a real estate media firm, Hanley Wood, the baby boomers wish list includes a great location, close to the “action”, nice community and open layout. The results further showed that boomer buyers value the first impression of a community and feeling welcome.
* Amenities are also huge draws. Some favorites include clubhouses, pools and walking trails. But above all else, location reigns supreme as a gateway to the fun stuff: restaurants, shopping, and entertainment. Proximity to medical services also ranks as an important factor.
Rules to protect widowed homeowners from foreclosure
It’s about time…..Consumer Financial Protection Bureau issued new rules aimed at protecting widowed homeowners from a red-tape nightmare that has caused them to lose their homes to foreclosure.
The regulations generally give surviving spouses who are not on a mortgage note the same protections borrowers have. Those include a ban on so-called dual tracking in which mortgage servicers negotiate with clients to modify a mortgage while simultaneously pursuing foreclosure.
The rules, which expand and clarify existing guidance from the agency, were long awaited by consumer groups that are pushing similar regulations in a pending California case. Often companies won’t allow a modification until the surviving spouse assumes the loan, which can’t happen until the owner is current on the mortgage — something of a Catch-22.
The new rules, which take effect in about 18 months, seek to address those issues. In addition to banning the dual tracking of survivors, the rules stop servicers from mandating survivors first get current on payments before receiving a loan modification. Applicants, however, must still show they can afford even a smaller loan payment and servicers are not required to give a modification.
Foreclosures inventory in decline….that’s good news
For several years after the start of the “great recession”, home foreclosures fast became old news. Every day there were more and more reports of tremendous losses in home equity, especially in California (think Interstate 5), Nevada, Arizona and Florida. It got so depressing that I stopped reporting on foreclosures.
But now, we have some good news — a report last week from CoreLogic shows the foreclosure inventory declined by 24.5 % and completed foreclosures declined by 6.9 % compared with May 2015. The number of completed foreclosures nationwide decreased year over year from 41,000 in May 2015 to 38,000 in May 2016, representing a decrease of 67.9 % from the peak of 117,813 in September 2010. Disclosure rates fell in 29 states while in North Dakota, home to oil industry troubles, disclosure rates inched up slightly.
Want to remodel? What projects bring best ROI?
The best advice: Get a local expert, preferably an experienced real estate agent like me who knows the neighborhood, what’s popular and what’s important in terms of increasing a home’s value. I get this question all the time: What’s the best home improvement that will generate the highest return on my investment? You can’t take a national survey that spits out a Top 10 list because what works best in Minnesota may not make the Top 10 in Southern California. “Also, please keep in mind that remodeling your home so severely to suit your particular needs, could when you go to sell it cost you money for the potential buyers to put the changes back.”
Projects can fall into “price categories” such as those costing between $5,000 and $25,000. And we all know, don’t we that you can’t get much for these dollars. But there are many home improvements you can do within this budget such as improving your curb appeal with fresh landscaping, a new front door, and some exterior painting.
In projects from $25,000 to $100,000, the most popular are a new kitchen, bathrooms, plus low maintenance decks. While these are immediate winners in terms of enhancing the living environment, they may not translate to the gains you were counting on.
“In the end, it’s critical you understand what the local market wants…what are buyers seeking. What turns them on, off?” Carole Schiffer said. “It’s really not about what the seller wants to upgrade…it’s what the buyer desires in the end.”
In the spirit of the Olympic Games (have you been watching? I have). I am attending the Coldwell Banker Community Foundation fund raiser at the Hollywood Bowl where the featured entertainment will be famed musician Brazilian Sergio Mendes and all 72 of us are looking forward to sambaing up and down the stairs of the Bowl? When I am finished dancing, it will be to selling and leasing real estate.
Please check out my lovely lease in Mountaingate at 12361 Ridge Circle. It has new flooring, painting and a lovely view of the north golf course. It is a 2/2.5 and den and is waiting for someone to come and make it their home for $6,900. Please let me know how I can assist you with any of your real estate needs.
In the meantime, looking forward to hearing from you with your “one arm bandit” bets.
COUNT ON CAROLE
Market Knowledge Counts
I have Westside blood in my veins. I was born here, grew up here, attended college and grad school here (ULCA, thank you), and I have dedicated my business and personal life to enhancing our community. Through this commitment, I know that this market knowledge is key to success. Count on it.
Carole Schiffer. The Westside Expert