Timely Real Estate News………………………………….. 15 August 2019

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Sales surge in July…. back in positive territory
It was good news to see that July single-family home sales surged more than 10% compared to a year ago. Sales for the five communities I report on had total sales of $2.311 billion compared of $2.093 billion in 2018. That’s a nice bump considering that we have been in negative territory for over 18 months.

Sales for Beverly Hills was plus $164 million for July compared to July 2018 and Bel-Air/Holmby Hills was $165 million to the good. Brentwood turned positive with $10 million over 2018, but the others were down. Beverly Hills Post Office was off $106 million, Westwood/Century City was down $24 million and Venice was down $70 million compared to last year

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Median Sales Prices — a Wow month for BH
Again, Beverly Hills is the leader in median sales prices for July 2019 — having reached $8,599 million MSP for July 2019, a 52% jump over June 2019. Brentwood was another MSP winner, growing by more than 77% over June for July with an MSP of $5.007 million. BHPO was up just 2% for July. The other communities I report on were down — Bel-Air/Holmby Hills was down 46%, Westwood/Century City was off 4%, Venice was off 5% from June. As always, I must remind you that one or two high number sales skew the numbers.

What we are seeing is a resurgence in the area’s most popular cosmopolitan community — Beverly Hills. It’s always on the high-end buyer’s radar because of its attractiveness in residential neighborhoods, shopping, and dining. But as I have said so many times, the median sales prices are like roller coaster with home prices and sales volumes very volatile, especially in these economic times.

It is interesting to note that the median sales prices for all these communities stayed within the range of a minus 5% to a plus 2% on year-to-date performance…meaning, we’re continuing to hold our prices steady but are surging in sales volume in some of our communities. There is a ‘drag effect’ on the nearby communities to Beverly Hills, always the leader in sales and pricing — so their ‘water lifts all boats’ so to speak.

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California affordability dips in second quarter
Affordability is dipping everywhere it seems, so it’s no surprise that California is experiencing this challenge. Thirty percent of California households could afford to purchase the $608,660 median-priced home in the second quarter of 2019, down from 32% in first-quarter 2019 but up from 26% a year ago. according to the California Association of Realtors.

A minimum annual income of $122,960 was needed to make monthly payments of $3,070, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 4.17% interest rate. 40% of home buyers were able to purchase the $475,000 median-priced condo or townhome. An annual income of $95,960 was required to make a monthly payment of $2,400.

Higher home prices negated the lowest interest rates in more than a year and reduced Californians’ ability to afford a home purchase in the second quarter of 2019,
Affordability remains the biggest challenge for us in California which is faced with an influx of new residents and not enough housing — including the shortage of multi-dwelling housing. And compounding the affordability issue is that builders and developers are pulling back on their plans for 2020, meaning that new housing will continue to be lacking throughout California and the rest of the nation.

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Most metro areas saw price gains

Price gains occurred in most metro areas in the U.S. under marginal inventory growth in the second quarter of 2019, according to the National Association of Realtors. Single-family median home prices increased year-over-year in 91% of measured markets in the second quarter, with 162 of 178 metropolitan statistical areas showing sales price gains. That is up from the 86% share in the first quarter of 2019. The national median existing single-family home price in the second quarter was $279,600, up 4.3% from the second quarter of 2018 ($268,000).
The metro areas where single-family median home prices declined included the high-cost areas of San Jose-Sunnyvale-Santa Clara, Calif., (-5.3%), San Francisco-Oakland-Hayward, Calif., (-1.9%) and Urban Honolulu, Hawaii (-1.2%). Ten metro areas experienced double-digit increases, including the moderate-cost metro areas of Boise City-Nampa, Idaho; Abilene, Texas; Columbia, Mo.; Burlington-South Burlington, Vt. and Atlantic City-Hammonton, N.J. Lawrence Yun, NAR’s chief economist, said home builders must bring more homes to the market. “New home construction is greatly needed; however, home construction fell in the first half of the year,” he said. “This leads to continuing tight inventory conditions, especially at more affordable price points. Home prices are mildly reaccelerating as a result.”

Ninety-three out of 178 metro markets under study have price growth of 5% or better. “Housing unaffordability will hinder sales irrespective of the local job market conditions,” Yun said. “This is evident in the very expensive markets as home prices are either topping off or slightly falling.”

The five most expensive housing markets in the second quarter were the San Jose-Sunnyvale-Santa Clara, Calif., metro area, where the median existing single-family price was $1,330,000; San Francisco-Oakland-Hayward, Calif., $1,050,000; Anaheim-Santa Ana-Irvine, Calif., $835,000; Urban Honolulu, Hawaii $785,500; and San Diego-Carlsbad, Calif., $655,000.

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Consumers put more faith in real estate than stocks
According to a nationwide survey by Bankrate, real estate has surpassed stocks as Americans’ favorite long-term investment. In the survey, 33% of 1,000 respondents named real estate as their favorite investment for building wealth that they don’t need access to for a decade or more. That is the best that real estate has performed on Bankrate’s annual survey in the last seven years. In 2018, stocks were the most popular investment.

Millennials, at 36%, were the most likely age group to call real estate their top long-term investment choice. Other generations also favored real estate, including generation X (31%), baby boomers (30%), and the silent generation (23%). “Millennials who are higher on real estate than any other age group, have cooled a bit on cash, and still aren’t keen on the stock market when investing for more than ten years,” says Greg McBride, Bankrate’s chief financial analyst.

Well, of course, we have seen these up/down trends since I have been in real estate for over 30 years. One only has to look at home prices and inventory shortages to understand the real estate dynamics — property values are climbing every year.

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It pays to be near a Trader Joe’s….home values increase
Where’s the power of a brand? Well, one thing is sure, being located near a Trader Joe’s has advantages. If you’ve ever had to drive 10 miles just to get some groceries, you’ll know just how much of a difference a supermarket can make in your day-to-day life.

Living in a food desert, or an area that has only quick-stop conveniences stores rather than supermarkets with fresh fruit and vegetables, is synonymous with more health problems, lower quality of life and, naturally, lower home values.

In a study by Attom Data Solutions, released last week, confirmed what many may have already felt intuitively. Homes within a close range of popular food stores such as Trader Joe’s and Whole Foods have high home value rates and investment returns.

On average, a home within close range of a Trader Joe’s is worth $608,305. Homes near a Whole Foods. Trader Joe’s is a Southern California tradition — having been founded in Pasadena in 1958. Bottom line, even though we Angeleno’s are tied to our cars, we all prefer to live near important services such as schools, dry cleaners, gas stations and markets. One of the questions I am asked almost every time I am showing property in either Bel Air Crest or Mountaingate… “where to you shop?”

We are lucky, we basically are in the middle of markets, in either Westwood or Sherman Oaks.

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New FHA loan policies will help alleviate affordability
The Department of Housing and Urban Development finalized new Federal Housing Administration condominium loan policies. The changes should yield thousands of new homeownership opportunities and help alleviate affordability restraints impacting markets across the country.

Specifically, the new policies outlined by the FHA extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The rule will go into effect in mid-October – 60 days from publication. HUD believes the changes will extend critical benefits to aspiring homeowners and confirm the agency is properly serving the public.

June condominium and co-op sales were recorded at a seasonally adjusted annual rate of 580,000 units. The figure represents a decline of 3.3% from May and a 6.5% drop from the same time last year. With more than 8.7 million condo units nationwide, only 17,792 FHA condo loans have been originated in the past year

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Competition for starter homes heating up
There are 19 million millennials renting, many of whom want to purchase homes. But market trends and emerging businesses and tools are hampering their dream of owning a home today. Many prospective first-time buyers cannot find a home that they can afford, or, even worse, overpay for their first homes, thanks to the legions of investors in single-family rentals (SFRs), whose cash offers often beat out bids from other buyers. Competition with investors is one of the reasons these 19 million millennials who want to buy a home and have the income to do so are still renting.

It is hard to fault a seller for preferring a cash offer over one backed by a mortgage, especially one from a first-time buyer who has yet to be approved. More than one out of four applications for purchase mortgages fail to close each month.

Still, many investors don’t pay all cash and rely on mortgage financing, which allows them to leverage the size of their cash investment, just like homeowners. About one in five purchases by small investors finance one-third or more of their investments. “Small investors” are defined by researchers at the Federal Reserve as those who purchase between three to 10 properties.

Investors are less sensitive to rising prices than home buyers, and rents for single family homes are rising as fast or faster than home prices. And getting a mortgage for a single family home as an investor is easier than ever before. So, the cards, in many ways, are stacked against the first-time home buyer “out there” on their own.

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Rising sea level could be devastating to our State
It is an alarming study — researchers say damage by the end of this century could be far more devastating than the worst earthquakes and wildfires in state history. In the most exhaustive study ever done on sea level rise in California, a team of U.S. Geological Survey scientists concluded that even a modest amount of sea level rise — often dismissed as a creeping, slow-moving disaster — could overwhelm communities when a storm hits at the same time.

The study combines sea level rise and storms for the first time, as well as wave action, cliff erosion, beach loss and other coastal threats across California. These factors have been studied extensively but rarely together in the same model.

The results are sobering. More than half a million Californians and $150 billion in property are at risk of flooding along the coast by 2100 — equivalent to 6% of the state’s GDP, the study found, and on par with Hurricane Katrina and some of the world’s costliest disasters. The number of people exposed is three times greater than previous models that considered only sea level rise.

And at a time when marshes are drowning, cliffs eroding, beaches disappearing and severe storms likely to become more frequent, scientists say even a small shift in sea level rise could launch a new range of extremes that Californians would have to confront every single year. And do not forget the recent cliff collapse where three lost their lives in San Diego two weeks ago.

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How are the “dog days of summer” affecting me?
Honestly, it has been a rough two weeks or so. You might have noticed that the last

Schiffer Line came out a little late last time, and it will again this time as well. I have prided myself on getting it out on the 1st and 15th of each month but unfortunately we had some challenges in the office that couldn’t be overcome, but we’re back on track now.

I am looking forward to a robust rest of the year. I know we all look at the ups and downs of the stock market, but as indicated in the article in this issue with all of us putting more “stock – pun intended” in real estate than in the stock market, we will ride out all of these uncertainties, so if I can assist you with any of your real estate needs, please let me know. Call me – Carole Schiffer at 310 442-1384.
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at carole@caroleschiffer.com www.caroleschiffer.com
CalBRE 00677619
©2019 Coldwell Banker Real Estate LLC. Coldwell Banker is a registered trademark licensed to Coldwell Banker Real Estate LLC 234567An Equal Opportunity Company. Equal Housing Opportunity. Owned and Operated by NRT LLC

Timely Real Estate News………………………………….. 1 August 2019

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It’s Hot, hot, hot… summer’s here and so is fire season

We can easily check our phones to tell us exactly how hot it is, by the hour, by location, and we’re seeing August roll in with 90+ degrees every day. What that means — fire season is here. It never left. As the LA Fire Department warns everyone, it’s a 12-month season.

Even though we have somewhat recovered from the drought (we had a great snowpack this winter in the Sierra), the lush, dry-brush landscape is just perfect fuel for fires, and they will come (we just had one in the Sepulveda Basin on the 30th – it was set off by propane cannisters). Remember last November, the Woolsey Fire — straddling the LA and Ventura County lines, it consumed over 97,000 acres as it marched from Thousand Oaks to Malibu. That fire cost 3 lives and 1500+ structures destroyed.

In my interview with Robert Feldman, one of California’s top fire and earthquake insurance professionals, he urges you to review your policies for both potential disasters. Remember, most home owner policies with a wrap-around do NOT cover smoke damage. And Feldman noted there are many options beyond what California plans that offer fire or earthquake insurance that can give you the coverage you need.

One more thing — make sure you have your Emergency Preparedness kits for home, office, and automobile.

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$236 billion worth of homes at risk from wildfires

According to the latest survey there are $236 billion worth of homes at risk of wildfire damage. Riverside is where the most homes are at a high risk of being damaged by wildfires, the study shows. An estimated 477,039 homes worth approximately $268 billion are at high risk — or a very high risk — of being damaged by wildfires. Riverside has more than $40 billion worth of homes at least at high risk, based on data pulled of “at-risk” homes flagged by the U.S. Forest Service. Sacramento is the metro with the second-highest number of homes at high risk, with slightly less than 55,000.

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Affordability is a drag on housing

This is no surprise as I have been focusing on critical housing shortages in California for the last decade where affordability has become a red-hot issue across all parts of our state. According to CoreLogic, the San Diego-based real estate tracking firm, there are just a lot of folks priced out of the market an analyst says, leading to a sales decline in Southern California as home prices rose only 1.2% in June from a year earlier, while sales fell 8.8%, reflecting a broad slowdown in the region’s pricey housing market.

The six-county region’s median price — the point at which half the homes sold for more and half for less — clocked in at $541,250 last month,
Economists have blamed the lack of affordability for drastically slowing the housing market toward the end of last year and causing the region’s median home price to fall slightly in March from a year earlier — the first decline since 2012.

“Affordability has gotten to the point where there are just a lot of folks priced out,” said Jordan Levine, an economist with the California Assn. of Realtors. As I have also pointed out, buyers are becoming pickier and more sophisticated in their purchasing decisions. Frankly, they’re smarter and much more discriminating.

Mortgage interest rates have steadily declined this year, however, what I have seen is that we have been able to draw some people back into the market. This last week, the average rate on a 30-year fixed mortgage was 3.75%, down from 4.94% in November, according to Freddie Mac. For a $500,000 mortgage, the change would lower a borrower’s monthly payment by $280.

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Carole Schiffer named in top 500 for Colldwell Banker in U.S.

NRT (Coldwell Banker’s parent company) CEO & President, M. Ryan Gorman recognized Carole Schiffer for her outstanding performance in the fourth quarter 2018 for being one of the company’s top performers, placing in the top 500 agents out of 47,000 who work for NRT’s retail residential brokerage. NRT is the nation’s largest residential real estate firms. Carole offices at NRT’s Coldwell Banker’s Brentwood office on San Vicente, one of the company’s most successful brokerages in the U.S. Thank you all again for helping me get there! I really appreciate it.

Carole’s achievement is one of many she has received from NRT over the years, as she specializes in gated communities as well in properties in Bel-Air, Brentwood, Westwood and Century City, Santa Monica, Venice and Marina del Ray. Carole is a native of Los Angeles, graduating from UCLA with a BS in business, and receiving her MBA from UCLA’s Anderson School of Business. She has been a resident of Bel Air Crest since 1992 and has served in a variety of leadership posts. At Coldwell Banker’s Brentwood office Carole has served as a mentor for nearly 20 years and currently is a board member of the company’s non-profit foundation, Coldwell Banker Residential Community Foundation.

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As expected, Fed cuts interest rate

Fed Chairman Jerome Powell announced Wednesday the Federal Reserve would cut interest rates from 2.5% to 2.25%, a modest cut. Economists have been expecting this for months, and Powell indicated further cuts could be on the way. It’s the first cut in rates since 2008.

What impact will this have on the economy and in particular, real estate? Economists don’t agree on its impact — some believe the small cut will have little impact since the real estate industry had already anticipated the cut and had already lowered mortgage rates. Most corporations haven’t had trouble getting credit or loans, and lowering borrowing costs probably won’t boost car sales, which have already peaked after years of strong pent-up demand.

So, what’s the beef? Some economists feel that the lowering of the rates now will give the Fed little room to manage its firepower if and when a real downturn comes, but it could also add fuel to stocks and other assets that are already a very high level.

As for as our local real estate business — the lower rate cut really doesn’t impact sales today as our mortgage rates are still low and attractive to buyers who are in the market. Most economists feel the impact will be felt for those with short term car loans, home equity loans, etc.

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Rising home vacancies are a hidden part of inventory crisis

It’s not only the inability to find affordable housing, another reason may be that buyers can’t even find a house. Most of the focus over the housing crisis has centered on a shortage of homes for sale. But housing analysts and a new report from the National League of Cities are raising the issue that vacant and abandoned homes nationwide remain part of our housing crisis.
In some smaller cities and rural areas, vacancy rates have pushed upwards to 20% of the housing stock. Abandoned homes can sit for years and become a real drain on the local government according to Kim Hart, managing editor at Axios.
Cities hit hardest by housing vacancies are in the ‘rust belt and Northeast. In California, the Governor is actively pushing cities and developers to do more to alleviate the housing crisis.
Cities are exploring how best to tackle the blight. For example, some lawmakers plan to demolish many of the abandoned homes to clear the lots and make them more attractive to developers to add affordable housing. Some of these are homes that ended up in the foreclosure debacle and are still sitting there, — empty.
But demolition of a deteriorated home isn’t always the most feasible path financially. experts say it costs about $10,000 to demolish a single-family home—calling that estimate on the conservative side. And some cities are exploring other ideas such as taking possession of an abandoned or near-abandoned property and work with nonprofits to rehabilitate the homes for first-time buyers.

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Buyers flocking to gated communities

New US Census data shows that homes in homeowner’s associations are taking up a larger share of new construction and new sales than ever before. According to new data from the U.S. Census Bureau, there were 840,000 single-family homes completed in 2018. Of those homes, 64% or about 535,000, were part of an HOA. That compares to only 306,000 new, single-family homes that weren’t part of HOAs. Please remember this report is national. Unfortunately, we do not have the land available to build more gated communities in West Los Angeles. That is what makes the homes in our local gated communities all the more valuable.
Census data on the number of homes sold is even more lopsided: Americans bought 472,000 newly constructed HOA homes in 2018, but only 145,000 without HOAs. As a long-time resident of one of the largest gated communities on the Westside — Bel Air Crest — I can attest to the popularity of these private communities.

As a specialist in gated communities on Los Angeles’s Westside, I can attest to the rapidly growing interest in these projects because of the many advantages they have over traditional residential neighborhoods. Privacy and security are the primary reasons buyers are flocking to these gated projects, and also one of the major benefits is that an HOA-managed community can better maintain the roads, parks, common areas, and even the homes themselves.

Real estate developers also point out that is gated communities are great for the local government in the longer run because homeowners in HOA communities pay property taxes, but the local government doesn’t have to provide all the same sort of benefits.

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Bathroom economics — it pays to upgrade

One of the rooms in a house that everyone looks at when they are considering making a purchase are the bathrooms It is where buyers increasingly are making key decisions on whether to purchase the home. It’s not just a matter of tubs, sinks, faucets, and tile — it’s the little things that can make a different. It is very personal.

Here are four effective ways to help elevate a bathroom’s look…

#1 A “luxe” shower head — Let’s face it, everyone loves a great shower and there are a number of deluxe shower heads available on today’s market — an abundance of choices…it also helps to raise the shower head. It can be done for very little cost.

#2 Clean the tile grout. Grout has the potential to make a bathroom look cleaner. Just make sure the grout blends with your tile.

#3 Towel racks. If you’re not on a budget, install heated racks, but for sure, make sure the racks are properly placed next to the shower and are if possible large enough for two towels.

#4 Sink Faucets. A personal choice always that comes in many different shapes and sizes. According to one-bathroom designer, the key is to find one that ‘basically makes a statement’ in your bathroom. Have plenty of room around the faucets…. it’s easier to clean and manage.

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Back to School Month

Did you know that August is back to school month and has been since the 1960’s? I remember when I was going to school, traditionally it started in the fall, and ended in late spring. It was always still hot, particularly as the majority of the class rooms did not have AC. The reason for this was to allow the children of farmers in our agricultural society to help with planting and harvesting. Today, with families now living in urban and suburban areas, those needs have changed. With the change is school schedules, families that typically had taken their vacations in August, are now doing so in July, which has an impact in a lot of areas including the real estate market. I remember how much fun it was to to shop for all of those new school clothes and school supplies including the new lunch box/kit and back pack!

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What is going on with me?

We just leased the house on Folkstone to a lovely new tenant who will be moving in with her two young children in mid Sept. The fabulous home on Brookshire is still available for lease, but with the owner being gone now, I am not showing it until they return, and my other lease in Bel Air Crest on Weybridge for $23,500 is still being re-financed and until that process is finished, which be in the next few days. I can only show it as a “pocket listing”, so if you know of anyone who wants to lease a GREAT home in Bel Air Crest, preferably furnished, please let me know. At the moment, I am working with about 6 – 7 buyers, all of whom are looking for that “special” house in Bel Air Crest, Brentwood, and Santa Monica. With one of those clients we looked at a house the other day that had amazing ocean views, but was up a narrow and windy road and was basically on the edge of a cliff (certainly not my cup of tea, nor that of my client either). It is always fun for me to explore other areas.

I hope you keep cool in this hot weather, and please let me know how I can assist you in this “hot” real estate market. I look forward to seeing you soon.

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Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at carole@caroleschiffer.com
CalBRE 00677619
©2019 Coldwell Banker Real Estate LLC. Coldwell Banker is a registered trademark licensed to Coldwell Banker Real Estate LLC 234567An Equal Opportunity Company. Equal Housing Opportunity. Owned and Operated by NRT LLC

Timely Real Estate News………………………………….. 15 July 2019

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Behind enemy lines…but we’re overcoming…

It seems we’ve been fighting from behind since early 2018 when we ended last year 9% behind our total sales volume for 2017.  It only got worse as we moved into 2019 with sales volumes down by as much as 25% through April for the five communities whose information I share with you.

However, since April, we have made our way back in sales across the board — and as of June, 2019, we’re only 2% behind for the year compared to a year ago at this time. That’s good news.  Sales

volume for Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City and Brentwood was $1.726 billion vs. $1.775 billion last year at this time.  Beverly Hills was up by $95 million over last year, and Brentwood was up $4 million, but BHPO was down over $100 million in sales volume for June, Bel-Air/Holmby Hills was down $24 million, and Westwood/Century City was down $31 million.

One of the other westside areas I work in is Malibu, which saw sales volume down substantially by over $152 million from $257 million, a 57% drop.  No doubt the impact of the Woolsey Fire played a major role in their on-going recovery from this disastrous fire.  More than 96,000 acres were consumed in that terrible fire which straddled LA County’s northern border with Ventura County.

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Median sales prices sound like a broken record….

The only trend emerging from June statistics — it’s just more of the same…flat, inertia. Our marquee market, Beverly Hills, came in with the almost the same median sales prices as 2018 of $6.235 million, just barely 1% behind.  Its neighbor, Beverly Hills Post Office, was 5% ahead of last year, but the other communities were down — Bel-Air/Holmby Hills was down 5%, Westwood/Century was down 10%, and Brentwood was down 2%.  Malibu was also down…by 9%.
In looking deeper at the MLS stats for last month, Beverly Hills had five homes over $10 million, the highest on Rodeo Drive at $19.5 million. Bel-Air/Holmby Hills had two over $15 million, with the highest at $31 million. Brentwood had a sale of $22.7 million.

Overall, median sales prices tend to be firming up — which is a good thing, and prices are holding their own for the most part as the range of matching the final sales price to the original listing price is in the mid-90% range, which means, sellers are getting more realistic about pricing their homes more competitively. And why not? We have buyers who have become much more discerning and sophisticated in their home purchases, and through their own research methods combined with a knowledgeable agent, there are transactions being made.

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Pending Home sales increased in May
This is good news….as always, pending homes sales is a key indicator of future sales volume and closings in the marketplace. Pending home sales increased in May, a positive variation from the minor sales dip seen the previous month, according to the National Association of Realtors. Three of the four major regions saw growth in contract activity, with the West experiencing a slight sales decline.

The Pending Home Sales Index is based on contract signings, climbed 1.1% to 105.4 in May, up from 104.3 in April. Year-over-year contract signings declined 0.7%, marking the 17th straight month of annual decreases.

Lawrence Yun, National Association of Realtors’ chief economist, said lower-than-usual mortgage rates have led to the increase in pending sales for May. “Rates of 4% and, in some cases even lower, create extremely attractive conditions for consumers. Buyers, for good reason, are anxious to purchase and lock in these rates.

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LA Home prices have never been higher
That is good news if you’re a seller, not so much if you’re a buyer. According to real estate tracker CoreLogic, LA’s median sale price climbed to $615,000 in May, tying an all-time high.

Still, the growth of home values has slowed since last year, when price records fell in every month of the summer. May’s median sale price was just 1.7% higher than it was 12 months earlier. At that time—May 2018—prices were more than 8% above where they were the year before.
Across all of Southern California, the median sale price grew just 0.2% in the last year. CoreLogic analyst Andrew LePage suggests the slower rate of price growth may have a lot to do with the fact that home values are entering uncharted territory. “The flattening out of home price growth reflects the erosion of buyer affordability after years of rising home prices and last year’s run-up in mortgage rates,” he writes in a monthly report.

Many buyers according to CoreLogic may be waiting for a drop in prices before purchasing; others may simply be priced out of the market. But it is clear that prices are not receding to the point where the market in West Los Angeles is for the most part willing to accept more first-time buyers with limited budgets. Affordability is the issue, and that is true throughout Southern California, not just in LA County.

In a review with CoreLogic and a panel of experts, home prices may come down slightly, but “don’t expect a steep decline. It won’t happen.” California is feeling the full force of a booming economy with an unemployment rate clocked at a record low of 4.2%.

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Supersized mortgages are “in”
Borrowers are not shying away from “supersized” mortgages according to a recent report from the Mortgage Bankers Association. They found it easier to access credit in June, but it was jumbo mortgage credit that saw some of the highest growth. Jumbo loans—mortgages with higher debt—are on the rise and were easier to get in June than any other

month in the past eight years.

Jumbo mortgage credit rose for the sixth straight month, rising to its highest level since 2011, when the MBA’s survey began.

A jumbo loan is a type of financing designed to finance luxury properties and homes that exceeds the limits set by the Federal Housing Finance Agency. The values vary by state. As of 2019, the limit for a jumbo mortgage was set at $484,350 for most of the country, and up to $726,525 in counties with higher home values.

Mortgage rates for jumbo loans have remained low, which may be adding to their appeal.

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Fed to cut interest rates?
Chairman Powell thinks so. Federal Reserve Chairman Jerome Powell signaled to Congress last week that the central bank is prepared to cut interest rates as soon as this month despite an improved employment picture and less incendiary trade battle with China.

Testifying before the House Financial Services Committee, Powell noted that in June, Fed policymakers believed the case for lower rates had strengthened amid the trade tensions, a slowing global economy and muted inflation.

“Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook,” Powell said in his prepared testimony.

He later added, “We see the economy as being in a good place, and we’re committed to using our tools to keep it there.”

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Earthquake Insurance — a whole lot of shakin’ going on
It’s never dull in Southern California. Yes, Mister Earthquake, we’ve been expecting you…we now have a major statement, albeit 100 miles north of Los Angles. But big, shaken’ statements they were…like 6.4 and 7.1 on the Richter scale. If you were driving, sleeping or even taking a shower, you probably didn’t even feel them. But I did in Coronado. It was very faint, but I felt it none the less. I also felt the one this past Friday morning at home in LA. My sister tells me that they had 3 last week in Vancouver, BC Canada which might have also been part of the one in Seattle.

I’ve been getting a lot of questions about earthquake insurance, and no, your homeowners insurance policy doesn’t cover specific damage caused by an earthquake. I shared with you the keen insights of disaster insurance guru, Robert Feldman, about the challenges of getting the right coverage for fire and smoke damage insurance. Now, it’s time for his views on Earthquake Insurance.

* There is a lot of insurance coverage out there — private companies and the state-issued California Earthquake Authority insurance, which Feldman feels is not as good in terms of price and coverage. Private firms offer more-than-adequate coverage but you have to be careful in comparing coverages and price. It can get complicated.

* Of the four major companies that Feldman represents, only three are still offering earthquake coverage after the latest round of quakes. “One company has put a moratorium on providing this insurance for the whole state. But the other three offer solid coverage and fair prices.”

* Ideally, you should always have what is known as a Combined Single Limit policy that covers all categories. This is the standard for the best coverage, and Feldman says that many homeowners fall into the trap of not accepting the full coverage because they want to save a few bucks.” like $50 to $100 that could drastically affect their total coverage. You have to look at the coverage and not the price!”

Feldman notes that the recent California fires and earthquakes have awakened homeowners and businesses up and down the state that they need to review their coverage for fire and earthquakes because they could strike anywhere, anytime.

If you would like more information, please contact me…Carole Schiffer, 310-442-1384. Or visit my website — www.caroleschiffer.com.

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Thank Kate Sessions for the beautiful Jacaranda trees
There is nothing really more inspiring than to drive under a canopy of blooming jacaranda trees, their vibrant purple flowers forming a tunnel of pure beauty that puts a smile on your face. You can’t help but feel pleasure to experience these magnificent creatures of Mother Nature.

Well, we can thank a pioneering horticulturist, Kate Sessions, for making the jacarandas so popular and making over our natural environment in Southern California. Born in 1857, Kate was one of the first females to graduate from the University of California Berkley in 1881. She moved to San Diego where she eventually found a way to feed her passion for plants by leasing 32 acres across from the city of San Diego in 1892, where she focused on planting trees in the adjacent city land, which by now was the genesis of Balboa Park.

She single-handedly transformed much of San Diego with her horticultural work, and as word of San Diego’s transformation into a colorful and lush environment quickly spread up the coast, her popularity and success with exotic plants expanded. She demonstrated that these new plants and trees could flourish here in Southern California. She quickly made such species as the Jacarandas, with their beautiful blossoms in a distinctive purple color, an easy sell. Jacarandas were planted extensively in Los Angeles and Santa Barbara in the 1920s and 1930s.

Sessions died in 1942, and she is the only woman in San Diego that has a statue dedicated to her achievements, now displayed in Balboa Park.

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Carole’s Business`
I want to personally thank all of you for helping me be part of the prestigious top 1000 Sales Associates, and the top half of that of all of the
50,000 Coldwell Banker agents nationally. I could not have done it with you!!!!!

We are experiencing a little of the summer doldrums with families on holiday. I am still getting a lot of activity on my lease at 11812 Folkstone Lane, which is listed for $10,000 a month. Unfortunately, we have not been able to reach an agreement with any of the prospective tenants but we will keep trying.
The house on Brookshire is temporarily off the market while the owner is out of the country. I have a new lease listing coming on the market in the next few days. It is a lovely Custom home in Bel Air Crest, approximately 7285, sq. feet, according to the county assessor, 7/7.5 lovely yard & garden with pool & spa. We will be asking $23,500 furnished, and $22,500 unfurnished. Please let me know if are interested in seeing it as I can show it anytime.

If you have the chance, please call my office at 310 442-1384 and introduce yourself to my new assistant, Angela. I know she is looking forward to getting to know all of you.

In the meantime, please stay safe with the fire season and current swath of earthquakes and let me know how I might assist you with any and all of your real estate needs.

 

Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at carole@caroleschiffer.com www.caroleschiffer.com
CalBRE 00677619
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