Timely Real Estate News…………………………….I5 July 2017
It’s all about the $$ in today’s real estate world….
You’ve heard it before…” show me the money!” And buyers are doing just that — driving up median sales prices and sales volume throughout the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby
Hills, Westwood/Century City, and Brentwood. Sales volume is up nearly 25% compared to last year at this time…. $1.951 billion for 2017 vs. $1.563 billion a year ago. Median sales prices are up in four of the five communities with Bel-Air/Holmby Hills showing no decline or increase.
What’s going on here? It’s the law of “supply and demand” obviously, and as I have been on my soap box for what seems like ions…it’s all about the lack of inventory that serves as the fuel for these increases…everywhere. Not just here on the Westside, but across the U.S. as well. The lack of inventory occurs in every region. So, we’re not alone.
Median sales prices moving steadily upward…
Make no mistake, we’re climbing back to the pre-2007 price points (pre-inflation) quickly. Here’s what’s happening to median sales prices — Beverly Hills was up 13% through the first half of 2017 at $5.950 million…Beverly Hills Post
Office was up 21% at $2.950 million. Westwood/Century City was up 6% at $2.045 million…Brentwood was up 17% at $3.182 million and Bel-Air/Holmby Hills was even with last year at $2.208 million through the first six months.
Comparing June’s performance with last year, Beverly Hills Post Office was up a 54% in the median sales price category, as was Brentwood, up 12%. But as strange as it is…the other communities I report on were down when you match June 2017 with June 2016. The trend is simply this: Median sales prices are moving upward every month through the first half of this year. Sales volume is ahead of the first six months of 2016.
Interestingly, Pacific Palisades, another one of the areas I focus on, was up 12% in median sales prices through June 2017, and its sales volume was up 18% as well.
Is this healthy?
Not really. It’s great for homeowners who want to take advantage of this sellers’ market, but the reality is that we seeing overpriced homes sit for months on the market because some homeowners believe their home is worth more than it is. And we’re seeing first-time buyers turned away from these escalating prices, even in “lower priced markets” like Atwater, Eagle Rock (which are no longer in that category, but one of the hot areas currently for first time buyers is Jefferson Park, which is located west of SC, and south east of Culver City). Our dilemma is simple: We need more inventory and one would think this market would encourage more listings. But it ain’t happening. It’s a condition that will most likely last for some time. Possibly because Sellers don’t know where to go.
Lack of home ownership…a growing divide
In a recent national survey, there is a widening divide over housing affordability that shows that five out of 10 unmarried and non-white Americans view the lack of affordable housing as a big problem, compared to only 40% of married and Caucasian Americans.
The National Association of Realtors annually measures attitudes of American consumers and found that 84% of Americans now believe that purchasing a home is a good financial decision – the highest number since 2007. Yet six in 10 said that they are concerned about affordability and the rising cost of buying a home or renting in their area.
Housing affordability was ranked fourth in the top-five issues Americans face in their area behind the lack of affordable health care; low wages and debt making it hard to save; and heroin and opioid drug abuse, and ahead of job layoffs and employment.
Job growth with ’strings attached’…
The labor market is back on solid ground according to the Labor Department, however, even with a strong job growth
in June, workers are still struggling to get the substantial wage gains they’ve been craving since the end of the recession (June 2009) economists said. The economy added 222,000 new jobs, the best performance since February and above analysts’ expectations. The unemployment rate ticked up a bit to 4.4% from May’s 16-year low.
Retailers added a net of 8,100 new jobs but economists warned this was probably a one-time event this year…as shoppers are shifting their buying to online retailers. By the way, did you know that Amazon is worth more than 2X what Walmart is valued at?
Staging decreases time on market, increases $$
What’s the secret to getting your home “off the market” sooner than later? According to the National Association of Realtors, staging your home can decrease the amount of time it stays on the market and can potentially increase a higher dollar value. That’s the opinion of 62% of the member Realtors. “Buyers want to be able to visualize themselves in their new home, and a staged home can move the buyer into ’that place’.” It’s interesting that nearly 40% of the agents felt strongly that a staged home can greatly increase the walk-through traffic after a buyer sees the home online.
If I have a client whose home suffers in the “appeal category” — whether outside from the curb or inside — I have always urged their property be staged. Not all homes need to be staged, of course, but when they do require an upgrade, you should do it. One of the interesting ways in which a home can be staged is virtually which can offer a number of different styles of furnishing.
It’s obvious…parking in LA is a real pain
I’m not telling you anything you don’t already know…finding a parking space in Los Angeles, especially on the Westside, is a real pain…and this was confirmed by a national analytics firm that Los Angeles is the 2nd worst city in the U.S. to find a parking space. New York, of course, is #1. According to a report issued recently, motorists spend an average of 17 hours a year searching for spots on streets, in lots, or in garages. The hunt adds up to an estimated $345 per driver in wasted time, fuel, and emissions, according to the analysis
Here’s a handy hint: The AAA says 76% of drivers pull into parking spaces when the safer option is to actually back in. It’s called the “Back Up Plan”.
CA on verge of financing low-income housing
The California state legislature is moving a bill through the State Assembly to include a $75 fee for each mortgage financial transaction to create a $250 million fund to finance low-income housing. The bill is part of an overall $3 billion low-income
housing bond that would end the state’s mortgage interest deduction on second homes and redirect that money to low-income housing funding. This is an important bill as it affects second-home ownership and tax deductions. I’ll keep you posted on this.
Silver divorce…that’s what you call it after 50
Pew Research revealed increasingly, couples over 60 are divorcing more than younger couples. The situation is this: If you’re no longer in love with your spouse, both are toward the end of their careers, you’ve got equity in your home…kids have flown the coop… and the question is, what’s keeping you in the marriage? The answer for many over 60: Nothing! Pew calls this condition…the Silver Divorce.
Among U.S. adults ages 50 and older, the divorce rate has roughly doubled since the 1990s. The reasons are not surprising — women have worked and earned their own retirement funds, and… there is a lack of financial insecurity in the relationship, empty-nest syndrome, dating websites, and marital dysfunction. People are living longer, and women have gained more independence. According to Pew, women are standing up for a better quality of life. Did you know that 69% of all divorces are initiated by women?
As a real estate agent, I have been involved with couples suffering through a divorce, and frankly, it’s usually not a pleasant situation. As agents, we emphasize our neutrality and cooperativeness in helping both partners cope. These separations from home and neighborhoods can be very traumatic. It is always painful to be part of the process.
How did you spend your 4th of July?
I was very fortunate to once again spend a glorious week at my home on the beach in Coronado in San Diego? I have never seen the town as crowded as it was this year! We were there from the 2nd to the 9th and every Sunday night during the summer there is a concert in the park. When we got there, it was sooooo crowded people were standing in the middle of the street! As for the beach, forgot about finding a bear space on the beach after 8:00 am. At a party at a friend’s house to watch the fireworks, we could see 9 going off at the same time, including the one in the bay in Coronado itself. quite a show!
Back to real estate reality
Nothing is more jarring than returning from a holiday to have to jump back into work, and this past week has been no exception… no complaints here. We have leased the lovely Canyon in Bel Air Crest, but still have the fabulous Custom home in the community available for lease. It has temporarily been removed from the internet, but any and all information can be found on my web site, caroleschiffer.com. It is a good value and truly a wonderful home, so please do share the information with any friends or associates you have that might be interested. Am also working with clients for homes in Mountaingate, Santa Monica, Venice and working with my mentees. I am so very grateful for them as they generally expose me to other parts of the city that I don’t have as much knowledge about, as well as their refreshing interest in learning new things. I look forward to hearing from you to assist you in all your real estate endeavors. Please check out my Facebook, firstname.lastname@example.org