Timely Real Estate News……………………………………………….. 15 December 2016
Real estate market — a whirlwind comes to mind….
If I wanted stability and predictable outcomes every month, I shouldn’t have picked the real estate profession. I’ve been writing the Schiffer Line for nearly 10 years, and I certainly understand by now — some 240 editions later, that the business is much like a whirlwind — lots of ups, downs, twists and turns, we never quite know what to expect. November was no exception. We are still ahead of last year’s sales volumes by 4% at the end of our 11th month, t and we have some predictable price increases but not across the board. Compared to a year ago, the cities that were up in median sales prices were Beverly Hills (34%) over November 2015…Westwood/ Century City was up 12%…but Beverly Hills Post Office was off 2%, Bel-Air/Holmby Hills was down a whopping 54% and Brentwood was down 10% Every month there is something. We are lucky to live in such a dynamic, world-class area where you will find the differences in homes just a different as the people who live in them. Makes it all fun to deal with all the different life styles and personalities!
Median sales prices — a mixed bag
Again, we are dealing with the anomalies of each community and one cannot have one description that “fits all”. Beverly Hills continues to outpace the communities I report on each month with $4.712 million median sales price through November 2016, even with a 5% drop from a year before. Beverly Hills Post Office is up 5% with its median sales price at $2.572 million…. Bel-Air/Holmby Hills is down 9% at $2.148 million, Westwood/Century City is up 11% at $1.873 million, and Brentwood is down just 3% at $2,715 million.
In Santa Monica, another one of the great communities where I work, sales volume has remained pretty much constant — $581 million through November 2016 vs. $577 million a year ago, at this time. Median sales prices for Santa Monica is $2.225 million.
The challenge throughout all of the markets that I report on each month is the lack of inventory — sales prices escalate faster with less inventory and the market remains competitive throughout all urban and suburban Los Angeles. Cities like Atwater, Eagle Rock, Venice, Mar Vista, and Palms — all have seen the rising tide of home prices. It’s not a secret. As millennials reach into areas where there may be more affordable homes, residents’ objections make headlines…” we don’t want any art galleries in our neighborhood” — the first foray into gentrification.
What to do? Below, I have a recent article I just read that talks how now (Holidays and Wintertime) is a good time to purchase or sell a home. Rates remain low, even with the new Fed rate hike that took place on December 14…. truly, this is an excellent time to explore the market. I’d like to help you…. call me at 310-442-1384.
The Holidays and Wintertime may be the best time to buy, sell….
Let’s face it, looking for a home in mid-winter, with temperatures hovering just over freezing in many parts of America, just doesn’t sound like much fun. Maybe that’s why we live in Southern California, where a high of 65 seems ‘chilly’. So, why not go house hunting? That is what you should consider doing if you’re in the market for buying (or selling and then buying).
Whether you’re selling or buying, we’re now officially in the Holiday season. You might be surprised to know that houses listed from December 21 through March 21 had a 9% greater chance of selling within 180 days closer to the asking price vs. homes put on the market from March 22 through June 21.
Listing in summer is even worse. The same study shows homes listed from December 21 through March 21 had a 10% greater chance of selling at or near asking price vs. homes listed from June 22 through Sept. 20. The reason? Home prices peak in late winter/early spring when the least number of properties are on the market, when people are already out looking. So, if you get past the skeptical looks and snarky comments from your know-it-all friends, you might gain from putting your home on the market during the holidays.
Because there are less buyers in the Wintertime, there may be less competition for them and for buyers, one doesn’t have a mad-dash around town to fight for putting in an offer that has a chance of being accepted. For sellers, the Wintertime also means you don’t have to be fighting all the new listings because the Spring and early Summer are the month’s families get in gear to move.
Yes, there is a continued shortage of affordable housing in Southern California as housing prices continue to climb, but for buyers and sellers, taking advantage of this time of year makes sense, even in this “cold weather” where one can still stroll on the beach or walk in the mountains. Ahhh, Southern California….ain’t it just grand?
Fed raises rates as expected.
What was the worst-kept secret in town? — the Fed was going to raise rates at their December meeting. And they did, which didn’t surprise anyone as the market had basically adjusted already to the minor increase (a quarter point). What has surprised most economists, however, has been the rush to 20,000, which the Dow appears to be eager to reach, perhaps this week.
The U.S. Federal Reserve raised interest rates by a quarter point today and signaled a faster pace of increases in 2017 as the Trump administration takes over with promises to boost growth through tax cuts, spending and deregulation. The rate increase was the first since last December and only the second since the 2007-2009 financial crisis, when the Fed cut rates to near zero and deployed other tools such as massive bond purchases to stabilize the economy. The rate increase, regarded as a virtual certainty by financial markets in the wake of a string of generally strong economic reports, raised the target federal funds rate 25 basis points to between 0.50 percent and 0.75 %. “Job gains have been solid in recent months and the unemployment rate has declined,” the Fed said, noting that market-based measures of inflation compensation had moved up “considerably. “More significant was a fresh batch of Fed policymaker forecasts that indicated the current once-a-year pace of rate increases will accelerate next year. The Feds are anticipating 3 or more rates hikes in 2017 alone. With President-elect Donald Trump planning a simultaneous round of tax cuts and increased spending on infrastructure, central bank policymakers shifted their outlook to one of slightly faster growth, lower unemployment, and inflation just under the Fed’s 2 percent target. The Fed continued to describe that pace as “gradual,” keeping policy still slightly loose and supporting some further improvement in the job market. It sees unemployment falling to 4.5% next year and remaining at that level, which is considered to be close to full employment.
The bond market (MBS) is currently at -20/32, which means another bump to mortgage rates.
Should we be nervous about the future…. UCLA sees positive signs
I highly respect UCLA Anderson’s Forecast, and based on the election, there was some positive news says William Yu, an economist at UCLA, who is the co-author of Anderson’s latest report issued last week: “We are going to see a paradigm change on these two issues — international trade and immigration — under President- elect Trump, and I am optimistic about the direction we are going to see,” he stated. “We aren’t going to see some kind of disaster happening next year.”
Yu says he sees only about a 10% chance of a trade war with China or Mexico, partly because those countries “have much more to lose than the U.S. if a trade war happens.” And while there have been mixed messages thus far from President -elect Trump, the essential point is that his goal of increasing employment, especially in California which sees more than 40% of all trade going through the state’s ports, and more than a quarter of undocumented immigrants in the US live in California — many of them working in agriculture, hospitality, and manufacturing.
With California being the sixth largest economy in the world, Anderson’s report points out that Mr. Trump is not going to risk doing anything drastic to affect the nation’s most robust economy. Wu believes that Trump’s call to Taiwan’s president was a shot across the bow that he wants a better trade deal with China. But Wu also stated that axing imports from China would mean that investments by Chinese in condos, movie studios and even carmakers would have a negative impact in the state.
Wu believes that one of the biggest negative impacts on the California economy is that we will lose jobs because of the higher minimum wage but this could be offset if President- elect Trump increases defense spending, one of California’s traditional strengths.
Handy hint department — Check your headlights…. the life you save….
Headlights? Most of us never give them a second (or third) thought…they turn on when they are supposed to…the beams seem to work perfectly…so what’s the big deal? The big deal is that the new polycarbonate headlight lenses may look Ok but over time, they can become a safety hazard. With inclement road conditions these headlight lenses get ‘foggy’ and can diminish your ability to see as far and as clear as they were designed. You can purchase easy-to-use headlight cleaning kits (the easiest way, trust me) …. or you can do some simple DIY methods using soap, water, and crazy as it sounds, toothpaste. It’s not complicated but any auto that is over two years old probably is in need of some tender-loving headlight care.
Need a cute, last minute gift idea?
One of my neighbors, Vicki Tashman has written a darling children’s book “Buzzy & Thomas Move into the White House”. It is an historical novel about one of President Thomas Jefferson’s beloved dogs not wanting to move out of Monticello into the White House with his master. It is available on Amazon. Here is the link for you to check it out.
The residents of The Ridge in Mountaingate will soon have a new neighbor! We have leased this lovely home with a great view of the golf course. Please let me know how I can assist you in either the sale, purchase, or leasing of your home anywhere on the planet.
Please consider my new listing in a great part of West Los Angeles/ Westwood area! It is a 4 bedroom (5th bedroom is currently a walk-in closet), 4.1/2 bath house. The master suite is on the ground level and has high ceilings, family room and a gourmet cooks kitchen, a resort like back yard including a pool. We are asking $12,500 a month, and will be available soon after the middle of January when the current tenant moves out
This is my last Schiffer Line for the year as the next document you will receive will be my quarterly/year end update. For that reason, please accept my sincere wishes for you to have a wonderful holiday whatever you celebrate, Christmas, Hanukkah, Kwanza, and that all your wishes/dreams come true. I also want to thank you all for your business, support, friendship, and encouragement for the past year and look forward to spending some time with you in 2017!
Have a fabulous Holiday and I will speak with you soon. Please do not forget to visit my web site, Caroleschiffer.com, and http://www.facebook.com/CaroleSchifferRealtor, or on Instagram at caroleschifferrealtor.
COUNT ON CAROLE
We’re a team…right from the beginning. As a buyer or seller, you expect the ultimate in service…and you should demand and expect the highest level of teamwork – keeping deadlines and promises…follow-through at every level. You should expect and receive nothing less from me. Yes, teamwork counts.
Carole Schiffer. The Westside Expert
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