Timely Real Estate News…………………………………..I5 May 2017
Blue skies are smiling on Westside real estate
It’s Claude Monet kind of day — blue skies, a few white clouds floating by, and Spring is in full bloom, especially with our real estate market. The highlights in the five communities I regularly give you real estate reports on — Beverly Hills, Beverly Hills Post Office, Bel-Air, Westwood/Century City, and Brentwood — showed a remarkable 26% increase in sales volumes compared to this time last year. That’s a huge jump compared to the previous years…” we never had that big an increase this early in the year,” Carole Schiffer stated. “It’s very encouraging.”
Sales volumes for these five communities was $1.087 billion through April 2017 compared to $860 million a year ago. We are catching up with the number of units sold — with 231 sold through April 30, 2017 compared to 237 last year at this time. What’s more important is that days on market (DOM) has come down from an average 79 DOM in 2016 vs. 68 for this year. All of these communities were up in sales volume over last year, with Brentwood, Bel-Air, and Beverly Hills leading the sales volume parade.
Median sales prices are being knocked out of the park….
Leading the home run derby this month was Beverly Hills Post Office, which posted a 197% increase in median sales over a year ago — with a MSP of $7.588 million, well over its $2.550 million MSP last year. Beverly Hills was at 103% over last year…. Westwood/Century City was up 66%, Brentwood saw a 35% increase, and Marina del Rey was up 33%.
But the impressive numbers for the westside real estate market are the median sales price increases since January 2017. Beverly Hills led the communities I report on with a 45% increase in median sales price of $6.200 million through the first months of this year, followed by 40% increase at $3.569 million for Brentwood. Westwood/Century City had a 25% increase at $2.100 million; BPHO was at 12% increase, but Bel-Air was trailing at 6% compared to last year. Marina del Rey was up 41% compared to last year through April at $1.457 million. “This is a very strong showing for the first months of the year, and while we are slightly down in units sold, we’re creeping back to previous highs.”
There were some big sales in this market, of course — there always are it seems. Beverly Hills Post Office had a sale for $26+ million and Bel-Air had one for $40+ million. There
have also been several big sales in Malibu as well. Seventeen out of 20 homes in Beverly Hills sold for $3 million-plus; BHPO had 9 out of 12 sold over $3 million; And Brentwood had 11 out of 20 selling for more than $3 million. As reported last week, we are making real progress in homes in the $5 million-plus and up range in Los Angeles County. Please also remember that these numbers are coming from the Multiple Listing Service (MLS), and do not take any private sales into consideration.
I know, I know, you are probably bleary-eyed looking at all these numbers, numbers do count. We measure our market’s success on our home values, median sales prices, units sold and days on market. It’s in my blood, my DNA. It is the only way I can convey to you “how are we doing?” Fortunately, we have a reporting system that works, most of the time. We get it wrong sometimes, but the reality is we live with a very dynamic real estate market in dynamic times. Some people are nervous about selling or buying (they don’t know if they will find a replacement property that they can afford or will “be beat out” by other buyers, some of which will be all cash buyers. But we are seeing real strength in our market — and that’s a testament to our communities’ assets – our schools, neighborhoods, city offerings, culture, and of course the fabulous weather and location. You can’t beat living here. We do have it all.
Baby Boomers — don’t complain. Millennials are worse off.
As you look down the generational ladder, like many of you, we seem to think that the younger generation really has it easy. Think about — children with an iPhone at the ready when in grade school, an Apple laptop to put in their back pack on their way to college, and with the entire 21st century in front of them as they march down the yellow brick road, we have a great of excitement for them and their futures. But what is happening is that truth serum is now hitting the real statistics for millennials.
For example, millennials earn approximately 20% less than boomers did at the same stage in life….26% in college are planning to move back home with Mom and Dad, even though they have earned a degree with the concept they would be launched into a career and their own place. According to the new survey, the burden of college debt continues to weigh on the finances and life choices of young people between the ages of 20 and 26, with 32%saying they owe anywhere from $10,000 to more than $50,000 on student loans. The average student loan balance was $10,205, but was even higher ($11,475) for those still in school.
Millennials do have one thing boomers do not have: More time. Millennials said, rather bravely, that to move back home after college was a big of a letdown — 30% said they would be embarrassed if they were still living at home with their parents if they turned 30 and 34 but at least 11% they wouldn’t feel really embarrassed if they still lived at home beyond age 35. “Go figure”!
“It’s not the same anymore,” Carole stated. “And that’s why many baby boomers are not putting their homes on the market — kids are still living at home.”
Student debt? No problem. Fannie Mae to rescue
Your ship has come in. Student debt gets a break, finally. There is some good news for home buyers and owners burdened with costly student loan debts: Mortgage investor
Fannie Mae has just made sweeping rule changes that should make it easier for you to purchase a first home or do a “cash-out” refinancing to pay off your student debt. Fannie’s new policies could be game changers for large numbers of consumers. Roughly 43 million Americans are carrying student debt — $1.4 trillion nationwide — according to industry estimates. These not only are a drag on borrowers’ ability to save money, but are a key reason why so many young, would-be home buyers remain renters — or are camped out in their parents’ homes.
There are three big changes that Fannie Mae has made that could affect you: If you’re one of the 5 million-plus borrowers who participate in federal reduced-payment plans on your student loan, your actual monthly payments, as reported to the credit bureaus, will count toward your debt-to-income (DTI) ratio calculations. If your payments were originally supposed to be $500 a month but you’ve had them reduced to $100 through an “income-based repayment” plan, only the $100 will be added to your monthly debts for DTI purposes. Previously, lenders were required to factor in 1% of your student loan balance as your monthly payment on the student loan, even though you were actually paying a fraction of that. As a result, many borrowers’ debt ratios were pushed beyond most lenders’ underwriting limits.
For an estimated 8.5 million American homeowners who are still carrying student debt, Fannie Mae has lowered the costs of a “cash out” refinancing, provided the extra cash you pull out from your equity is used to retire your student debt. Among the potential beneficiaries: parents participating in “parent plus” programs that help pay off their kids’ student debts, and parents who have co-signed for their children’s student loans. Fannie Mae is also eliminating the extra fee it charges for cash-outs, if the funds that borrowers withdraw pay off student loan debts.
There’s a lot more to this new policy, so check it out. http://www.fanniemae.com/portal/media/financial-news/2017/student-loan-debt-6546.html
California continues its economic leadership role in US. Despite events in Washington DC regarding climate change, the economy, immigration, and other anxious-generating issues, California is doing just fine. Bloomberg reported that much of the U.S. growth can be traced to California laws promoting clean energy, government accountability and protections for undocumented residents. Governor Jerry Brown, now in his fourth term, considers immigrants a major reason for the state’s success: “39 percent of us are Latino and the majority are from Mexico,” he said in a recent interview.
In looking at California, which is one-eighth of the U.S. population with 39 million people and one-seventh of the nation’s gross domestic product of $2.3 trillion, when figures are officially tabulated for 2016, California’s economy is bigger than ever, rivaling the U.K. as No. 5 in the world. California’s borrowing cost is 0.15 percentage points lower than the average for other states and municipalities and has declined to just 0.24 percentage points more than the U.S. pays on its debt, down from 1.97 percentage points in 2013.
According to data compiled by Bloomberg, since November of last year bonds sold by California’s municipalities produced a total return of 2.3 percent, outperforming the benchmark for the U.S. The growing popularity of bonds sold by California issuers is a consequence of the state’s more rigorous regulation of the market, specifically legislation signed by Brown last year, thus creating greater transparency and accountability for issuers of California debt.
We have many accomplishments in California for which we can be proud. Still, like other states, we’re nervous about health care, the economy, climate change and the impact of loosening federal regulations on fossil fuels. California is unique, and fortunately, the world knows it. From a real estate perspective, we just need more inventory…a Realtor talking.
Ah, ha…bootlegged units soon to be legal
Remember when you converted that space above your garage to a studio apartment for your grandmother? And when grandma passed on, you thought, hmmm, that would be a nice piece of income if I rented it out. That’s how bootlegging happens, and it happens a lot in Los Angeles County. Now there is help for those of you who might have unwittingly broken the law.
The Los Angeles City Council voted 12-0 last week to approve an ordinance that would permit previously unapproved dwelling units — an estimated 5,000 units they know about — that had been “bootlegged” into multifamily properties. The ordinance provides a path for the legalization of units often created when apartment building owners divided single apartments into multiple unit dwellings.
The ordinance, part of the city’s effort to alleviate a shortage of affordable housing the city, required that in return for legalizing a bootlegged unit, the owner must provide at least one rent-restricted affordable unit for up to 55 years.
To be eligible, the residential or mixed-use building with the unapproved dwelling unit must be located in a multiple family zone of R2 or above. The owner must demonstrate that the unit existed as of Dec. 10, 2015, and the building must be free from other code violations. There is no free lunch, especially for granny flats.
The Fed will continue its 0.25% march in June…. maybe
Depending on the May data, there’s always a chance the Fed will retreat. April employment was strong, and the balance in payments is even more encouraging, but the reality is that the Fed is struggling to maintain a balance to keep the economy inching forward since
performance in this year’s Quarter 1 was miserable. Manufacturing is down a touch but the service section is absolutely booming.
U.S. products fell by 0.6% in the first quarter and is now running barely above zero annually. Our population growth is struggling to hold 1%, and heavily dependent on immigration now threatened by the potential court rulings. But according to economists, the Fed has assumed a 2% speed limit for after-inflation growth, and the new productivity stats make that look too high.
Again, like real estate, numbers reign. I will keep you posted on how all of this impacts the real estate market. Right now, in our market, real estate is booming…we just need more homes to sell.
LAX…it’s a moving experience. Call ahead.
Twenty-one airlines are relocating their terminals starting on Friday, May 12 through May 16. What are you saying? Yes, as part of a planned modernization project at LAX, 21 airlines are participating in an orchestrated shift, which started last Friday. Delta is moving from Terminals 5 and 6 to Terminals 2 and 3.
As the nation’s #2 busiest airport, LAX hasn’t made any top 10 lists for best airports, and this is an attempt to update terminals and provide better customer service, and combine Delta’s service with their new partners. The move affects nearly one-third of the airlines who operate out of LAX. Updated terminals will be on the list as well as new ticket counters for those affected.
Caution: Please call ahead to determine exactly what terminal your airline is occupying before driving to LAX. This is obviously a work in process.
Business & Things
Have you seen my great new listing at 11813 Gwynne Lane? It has just been REDUCED TO $10,995,000 a month and is truly lovely. With 4 bedrooms, 3.5 baths, den, and office, plus an unfinished basement which is currently being used as a gym, but has been outfitted to be used as a home theatre. The back yard has a spa, fountain, and BBQ area. The house has been extensively updated. Hot off the Press. I have a new lease listing also in Bel Air Crest.. 2223 Queensborough Lane! We are asking $37,900 a month for this magnificent Custom home also in Bel Air Crest. It has 5 bedrooms, 6.5 baths, has been totally remodeled and upgraded and is waiting for its new residents to come and make it their own. All of this in the wonderful community of Bel Air Crest with its fabulous amenities including gym, club house, tennis courts, pool and spa, children’s playground, and doggy park. There is also 24 hour secured access to the community. I have a long and growing list of clients particularly for Bel Air Crest, Mountaingate, but other parts of the city as well. Inventory is low all over and if you are at all considering moving, please get in touch with me 310 442-1384.
More information on Rattle snakes!!!! PLEASE read attached link.
One of my readers sent me this very important information re Rattlesnakes. THANK YOU VERY MUCH). PLEASE read attached link. “FYI the fire dept. will come & take snake too. They have been to our house more than once”!
In my history of selling residential real estate for more than a week can always tell when the market has picked up and become strong. This has been particularly true of my 12 years of being a mentor, which is a great honor. I currently have 17 new licensees in my program, which is the most I have ever had. Of the 17, 6 of them are in the process of either writing their first offers, and/or running their first transaction (escrow). It all keeps me hopping and on my toes. I love it as I cannot play “old tapes” because it is necessary to stay with the current program.
I hope you all had a wonderful Mother’s Day, and look forward to a great Memorial Day. Speak with you soon. Check out my Facebook page, Carole Schifferfirstname.lastname@example.org, or web site. Caroleschiffer.com
COUNT ON CAROLE
What good is it to have a Realtor who does not listen to you? You expect only the highest-quality service and “listening” to client needs and wants is at the top of the list. The one lesson I learned early was to park my demands and needs in the corner. And listen to what the client has to say. Carole listens well. Count on it.
Carole Schiffer. The Westside Expert