SchifferLine 12 March 2007

Timely real estate news………………………………………………… 12 March 2007

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Gated Communities — To be or Not To Be
What lies behind those gates?  Isn’t this the question you always ask yourself as you drive by and see those impressive looking iron gates?  If you’re a resident of the twelve gated communities in the Beverly Hills, Brentwood and Bel Air areas, the gates offer a real sense of security in these insecure times, and provides, more importantly, the privacy many of us seek in a very cluttered world.  What a Realtor will tell you, however, is that gated communities can add between five to seven percent value to a comparable home outside the gates.  And that never goes away.

In some areas, like the Malibu Colony, the appreciated value can be higher simply because of the lack of outside-the-gates home — there is only one beachfront, one access, so exclusivity adds as much as 10-15% to the value.

The oldest gated community in Los Angeles is Larchmont which installed gates in 1908.  And gated communities have become the standard in ‘new areas’ like Newport Coast, the desert, and in other outlying areas where privacy and security are the two of the most important factors in selecting a place to live.

The twelve gated communities in the Westside are: Bel Air Crest, Mountaingate, Moraga Place, Brentwood Circle, Bel Air Park, Brentwood Country Estates, Beverly Ridge Estates (Beverly Hills Post Office), Mulholland Estates (Beverly Hills Post Office), Beverly Park (Beverly Hills Post Office), Stoneridge Estates (Bel Air), and The Summit (Beverly Hills Post Office).   There are other gated communities in Pacific Palisades.

Each of these communities place a premium on their gates, and as a recent article in the Los Angeles pointed out, “residents cherish the privacy and security.  But it isn’t cheap to operate the gated system — outside firms provide the staff, and sometimes, there is turnover with companies who provide these services, because well, homeowners can sometimes be sensitive to customer service and efficiencies.  The added cost to operate a gated community, however, is offset by a minimum of five percent added value, and on a $5 million home, you can add $250,000 to $400,000 to the price”. 

In the end, the peace and serenity gated communities provide are wonderful to have — if you can afford it and if you can find your dream home there.  It’s not for everyone, as the Times reported, but for most, gated communities are highly desirable.

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Westside is a collection of micro-real estate climates
Confusion it seems reigns in the media every day.  The stock market is up, the stock market is down, and the economy is up, the economy is down… all I know is real estate…. And here is what’s happening… There was good news — existing home sales were up more than expected in January (warm weather)…bad news — Freddie Mac is tightening home loan requirements and new homes sales were down by 16.6% over December, the biggest one month drop since 1994.  So what gives?

What gives is that what you have been reading about since our market has returned to ‘normal’ — not too hot, not too cold — prices and market conditions vary greatly around the country. 

However, in our little ‘neck of the woods’, the Westside is enjoying strong home appreciation.  In comparing February 2006 to February 2007 median sales prices, here is what we find:  Beverly Hills had a 23% increase over last year….Brentwood had a 12% increase over February 2006, and wow, Bel Air jumped nearly 55% over a year ago.  If you’ve been reading The SchifferLine, you’ve seen fluctuations in all of these markets, but the recent upswing in real estate on the Westside (my business is up over 200% over last year at this time)….is that we are blessed with a wonderful ‘micro-climate’ where the changes of weather and market conditions do not seem to apply to the Westside.  Real estate is heating up in other Westside communities, too — Mar Vista and Westwood are two examples of areas that show prices really escalating as well. 

Yes, we’re blessed with great weather (where is the rain, damnit?)…and a wonderful real estate climate to boot!  What could be finer?