The SchifferLine
Timely Real Estate News………………..15  December 2021

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Sales volume reaches $5.101 billion…a record
It comes as no surprise as sales volume for the first 11 months of 2021 reached a record $5.101 billion, a 48% increase over the same period in 2020, for the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood. While the percentage of increase over the previous 11-month period is a bit lower than at the end of October, the numbers are really staggering. It doesn’t seem to be abating. Mind you these increases are not particular to these communities but are all across the board. I am just discussing these five areas.

This record reflects the sustained success we have had for attracting buyers by offering the world’s most beautiful homes and neighborhoods…so really it is no great surprise that we continue these incredible sales achievements. The usual suspects continue to lead the sales increases — Beverly Hills was up $768 million in volume compared to a year ago, Brentwood came next with an increase of $419 million, followed by Westwood/Century City at $189 million-plus, with BHPO adding $163 million and Bel-Air/Holmby Hills bringing in $156 million. Marina del Rey, another area I specialize in, enjoyed an 86% increase in sales volume, reaching $214 million through November 2021 compared to $115,851 a year ago for the same period.

Homes are now selling at near 100% of original listing price, which is a positive upturn as some of the areas last month were experiencing as much as a 15% decline between the original asking and final sale prices….what does this mean? Sellers are getting better educated and are pricing their homes competitively. Some areas, where multiple offers were just ‘out of control’ were up 105% over original listed price. Just this past week, I was representing a buyer who is a long time client of mine in the attempt to purchase a fabulous home in Santa Monica. Seems that a number of potential buyers felt the same way about the house as there were 25 offers! It came on the market for $2,595,000, but the price was increased 2 days later by $100,000 and while we are not sure what it sold for, it

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Median sales prices….coming up roses !
Beyond record sales prices, we are also seeing record median sales price increases across the entire area. The isn’t new to those reading the Schiffer Line as I have been pointing out that our pricing continues to steadily move upward, and as the year has matured, our prices are also making increased gains in every area.

For example, Beverly Hills median sales price for November 2021 is $7.500 million, up 15% over November 2020. Beverly Hills Post Office is up 14% to $3.383 million….Bel-Air/Holmby Hills is up 30% to $3.025 million. Brentwood was up a whopping 73% through the first 11 months for 2021 at $3.874 million, and Westwood/Century City experienced a 13% increase to $2.626 million. Marina del Rey was up 18% for 2021 at $2.012 million.

November can be a bit crazy sometimes, because traditionally, it is the period of the once-assumed ’slow season’, which — as you can see — is not slowing down much. When you compare my areas’ performance of November 2021 to November 2020 (month-to-month), there are some stark differences. Bel-Air/Holmby Hills was up 246% in median sales prices to $7.987 million from $2.305 million, quite a jump. Beverly Hills was up 28% to $7.500 million (over November 2020), Westwood/Century City was up 97% to $5.200 million, Brentwood was up 63% to $5.200 million. However, BHPO was down 28% to $1.925 million, unusual for this very ‘hot’ area. Please remember my oft pointed out comment, when there are some high number sales such as the two in Beverly Hills a $16,050,000 and $21,500,00 respectively or BHPO for $21,500,000 or Bel Air for $9,000,000 or Brentwood for $13,000,000 and $16,645,000 and lastly in Westwood $12,800,000. These numbers obviously impact the averages. I must also remind you that these are transactions that went through the Multiple Listing Service, thus any and all private sales and there are many are not covered here.

My broken-record speech — the best measurement is to watch the trend lines of median sales prices over a period of a year…everything evens out over time, and the true value of properties emerge through the analysis of accumulated month-to-month data we get from the MLS. We’re in a good place — mortgage rates remain low (even in the mid-3’s — and Fannie Mae and Freddie Mac have increased the conforming loan limits to $970,800 which will enable many buyers to avoid obtaining a jumbo loan whose interest rates while still low are higher than the prevailing rates for a non jumbo loan.

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Re-financing takes dramatic upturn
A brief drop in mortgage rates, due to the first news of the omicron variant, caused mortgage refinance demand to rise dramatically last week. The rate drop wasn’t all that dramatic when looking at the weekly average of the 30-year fixed. However, the rise focused on how homeowners are now looking at ‘remote work’ continuing for some time and are adjusting to improving their home environments…hence the need for re-financing.

For loans with conforming loan balances ($548,250 or less through the end of 2021), fell to 3.30% from 3.31%, with points decreasing to 0.39 from 0.43 (including the origination fee) for loans with a 20% down payment, according to the Mortgage Bankers Association.

Again, that was the average. Rates had dropped sharply at the end of the previous week and then stayed there for a short period of time. However, it was enough time to cause a 9% jump in refinance applications week to week, seasonally adjusted. They were still 37% lower than the same week one year ago. Mortgage rates were 40 basis points lower at this time last year. Still, these are great rates compared to pre-‘Covid when rates were approaching over 5%.

Government (FHA) refinance demand saw an outsized 20% weekly increase. The refinance share of mortgage activity rose to 63.9% of what it had been in the past.

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High-end sales 
The high end of the Westside residential market just keeps getting stronger and stronger. There have been 1,032 closed sales of $5 million-plus so far this year, versus 636 at this time last year…that’s up 62%! Of these, 341 were $10 million-plus, versus 181 at this time last year, up 88%. Ninety-two (92) $20 million-plus were sold and there were 49 at this time last year— up 88%.

Twenty-nine (29) were $30 million-plus, versus 16 at this time last year or up 81%. Fourteen (14) were $40 million-plus, versus six at this time last year, up 135%! Seventy (70) of the 92 were $20 million-plus were sold to American buyers or 76%. Of the 92 $20 million-plus sales, 37 were not officially listed when sold. It is interesting to note how the highest-priced sale for the past three years has continued to rise.

The highest priced sale in 2020 was $165 million, and for this year, $177 million. Maybe we will have a $200 million sale in 2022.

The second top sale this year was in Malibu. The top sales in the other areas are Pacific Palisades for $83,000,000 and was unlisted when sold. And Bel Air had an unlisted home sell for $69 million.

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Rent hikes are heading our way, big time in 2022
Not only are we seeing dramatic increases in median sales prices in Los Angeles area and beyond, but we should also expect to see rental housing increases like never before. In some areas of the country, rents are doubling from a year ago. The reason is — huge demand and lack of supply.

We’re currently behind as much as 2 million housing units in California, where development of new housing encounters continued red tape at every level, and cities/counties simply cannot process the paperwork to keep up with demand.

But the problems aren’t confined to the law of supply/demand. Rents for single-family homes across the country jumped more than 9% on average in August 2021 from the prior year, according to a report from the analytics firm CoreLogic. It is estimated that rental housing has become so expensive in California that more than 50% of a renter’s income goes for housing. However, it is worthy to note that a state law states that a landlord may not increase rent more than 5% annually, plus the CPI increase.

Mark Zandi of Moody’s Analytics said the strains on the housing construction market were building well before the pandemic took hold in the states. “There’s a lot of evidence that the lack of housing closer to where the demand is and urban cores is having a meaningful negative consequence on long-term economic growth.“

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Pending home sales increased in October
Pending home sales increased in October, rebounding after a decline the month prior, according to the National Association of Realtors (NAR). Contract activity rose month-over-month in each of the four major U.S. regions.

On a year-over-year basis, however, transactions were split, as two regions reported drops and two others posted gains. The NAR Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, rose 7.5% to 125.2 in October. Year-over-year, signings fell 1.4%. An index of 100 is equal to the level of contract activity in 2001.

“Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” said Lawrence Yun, NAR’s chief economist. “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.

“The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years.” And while the market is expected to remain robust, Yun forecasts home prices will rise at a gentler pace over the course of the next several months and expects demand to be milder as mortgage rates increase.

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Environmental update
California regulators voted last week to ban the sale of new gas-powered leaf blowers and lawn mowers starting in 2024 and portable generators by 2028, the latest step in the state’s aggressive effort to reduce harmful pollutants and transition toward a carbon-free economy.

The new regulations by the California Air Resources Board require all newly sold small-motor equipment primarily used for landscaping to be zero-emission by the target dates, with some exceptions.

The agency’s decision is based in part on the belief that battery technology will improve, and zero-emission gear will become more widely available before the requirements kick in — though there will be an annual review to determine whether they are on target and whether regulation needs to be altered or delayed.

The restriction applies to homeowners and commercial landscapers alike, and the ban also includes gas-powered weed trimmers, chainsaws and power washers. The regulation does not ban existing gas-powered equipment, however, which can continue to be used.

Combined, these small gas-powered engines create as much smog-causing pollution in California as light-duty passenger cars. There are approximately 15.4 million small off-road engines in California, and they produce about 141 tons of smog-forming emissions per day, according to the agency.

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So, what about me?
It is not about me at all… As previously noted, while the office is a little quieter than usual, the market and my business is moving along at a brisk pace! None of my buyer clients are a breather in their quest for a new home. I have been working very hard to put my escrows to bed in the hopes that I will have a quiet and hopefully restful holiday It is a challenge, but I am working at it. I still have a number of potential buyers who are ready, willing and able to buy their new home, so sellers if you want to move, contact me… Carole@caroleschiffer.com or 310-442-1384. I am here to make it happen!

For the Thanksgiving holiday, I had some guests for dinner and then at 10:30 at night after we cleaned up my sister brother-in law and I headed down to our home in Coronado where none of us had been since February 2020. This house is our family “happy place” and it was wonderful to be there once again. We have a pet Seagull there whom we have named “peg leg” as you can see, he has only one leg. It was amazing to us that after not being there for almost 2 years the minutes we opened our window blinds in the am, there he was sitting on our window ledge waiting for his breakfast! He came back for every meal. Wonder who has been feeding him while we were gone?

We had our office holiday party last week, and I was able to visit with Santa Claus and share my wish and gratitude for this excellent past year.

I hope you have a wonderful holiday and have the ability to spend the holiday with family and friends

Thank you all again.

Merry Christmas,

Happy Kwanza and

Happy New Year!!!

 

 

 

 

 

 

 

 

 

The SchifferLine
Timely Real Estate News……………………1 December 2021

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US home sales rose in October…competition intense
Buyers continue to compete for a limited number of homes for sale across America, according to the National Association of Realtors (NAR). Existing-home sales increased 0.8% in October from the prior month to a seasonally adjusted annual rate of 6.34 million, the highest pace since January. Even though prices increased from September to October this year, sales fell 5.8% since last October 2020 when the market was at its peak for this cycle.

Low mortgage-interest rates have spurred a large wave of home-buying demand since the start of the Covid-19 pandemic. At the same time, the number of homes on the market has remained low, and new homes that are listed for sale are often snapped up quickly. As always it is truly a function of price… overpriced properties are sitting on the vine… even in a market like we are in.

Home sales typically decline after the summer. Many families do not want to move during the school year, and shoppers often stay home in cold weather and during the holiday season. High prices are also scaring off some buyers. The median existing-home price rose 13.1% in October from a year earlier, NAR said, to $353,900.

Even so, the market is on pace for its strongest sales in 15 years, said Lawrence Yun, NAR’s chief economist. “The housing market is remaining strong” due to continued low interest rates, a robust job market and rising stock-market values,” he said.

The frenzied housing market from earlier this year has somewhat plateaued. However, sales are still higher than pre-pandemic levels. Many buyers who have been sidelined by fast-rising prices are jumping back into the market if they see signs of a slowdown, economists and real-estate agents say.0
“The housing market is remaining strong” due to continued low interest rates, a robust job market and rising stock-market values,” Mr. Yun said.

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First-time buyers continue to struggle
It is no surprise in this inventory-challenged era that first-time buyers continue to struggle to compete with cash and non-primary residence buyers, according to the October 2021 Realtors Confidence Index report.

First-time buyers accounted for 29% of the existing-home buyers, a lower fraction compared to one year ago (28% in the prior month, 32% one year ago). The share of cash sales rose to 24% (23% in the prior month, 19% one year ago). The share of non-primary residence buyers (for rental and vacation/second home use) rose to 17% (13% in the prior month, 14% one year ago). Realtors reported that 23% of buyers waived the appraisal contingency clause (buyers who waived appraisal are likely cash buyers); and 21% waived the inspection contingency clause.

Among buyers who obtained a mortgage, the share who obtained FHA-insured mortgages decreased to 14% (15% in the prior month, 18% one year ago). Among first-time buyers, 72% put down less than 20% down payment, a lower share compared to one year ago (75% in the prior month, 76% one year ago). The report noted subdued market activity in October compared to one year ago and the prior month. The Realtors Buyer Traffic Index decreased further to 56 in October (57 in the prior month, 73 one year ago). Housing supply remains low, with the Realtors Seller Traffic Index registering at below 50 (“weak” seller traffic compared to one year ago).On average, sellers received nearly four offers (3.7) on their home sale (3.7 in the prior month, 3.4 one year ago). Respondents reported that on average, their buyer had made two prior unsuccessful offers on a home. Respondents reported that 42% of offers were above the list price, a lower fraction compared to 55% in June this year.

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Even with Zillow’s meltdown, iBuyer market surged
Before Zillow’s recent meltdown, national iBuyer market share surged to another all-time high, blowing past all previous records by a wide margin. In Q3 2021, iBuyers accounted for 1.6% of all homes purchased in the U.S. That’s around 28,000 homes, nearly double the 15,000 homes purchased by iBuyers in Q2.

The situation will certainly change with Zillow exiting the market and seasonality kicking in during Q4 2021. But for the time being, iBuyers have never been bigger, and Opendoor is now left as the undisputed category leader.

Also noteworthy: IBuyer Market share in Phoenix, the largest iBuyer market, peaked to a new high of 10.8%. This is the first time iBuyers have exceeded 10% market share in a major market — a significant, if temporary, achievement.

Both Opendoor and Zillow scaled their iBuying operations tremendously in Q3, but while Zillow’s business spectacularly imploded, Opendoor demonstrated critical economies of scale. As it grows, its net loss per home is improving.

What is this telling us? The great harm done by Zillow’s over-zealous approach to home evaluation caused enormous damage throughout the industry, especially for homeowners who falsely counted on equity in their home that simply wasn’t there. It is slowly healing now, but the trust between online data and actual home values has certainly taken a hit, a well-deserved one in my mind.

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“Let’s move closer to the kids…” A continuing trend
Parents, grandparents, friends — the desire to ‘stay close’ remains a major factor in why people are selling and moving these days. Among repeat home buyers and home sellers over the last year, a key factor for moving was the desire to live closer to family and friends, while an equally important motivator was the need for more space or a bigger home. Sellers as a whole were able to benefit in these transactions, typically earning their full asking price, and selling in one week.

These driving forces to move as well as further sales figures appear in the National Association of Realtors’ 2021 Profile of Home Buyers and Sellers, that analyses demographics, preferences and experiences of buyers and sellers across America. “During the pandemic, buyers and sellers have been driven by the desire to be close to family and friends, as well as the need for a larger home,” said Jessica Lautz, vice president of demographics and behavioral insights at NAR.

Among sellers, as a group they traded up in price, size and newer residences, as 46% purchased a larger home and 28% purchased the same size home.

Relocating to be closer to family had been increasing in recent years, according to Lautz, however, the COVID-19 outbreak accelerated that trend. And in past years, convenience to work and affordability had ranked as top factors for reasons to move.

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“Pouncing” is the new tactic in home buying
American home buyers are having to pounce faster than ever to clinch a deal, forcing many of them to make snap decisions about what house to purchase and how much to pay. I see it constantly — buyers are so afraid to miss a ‘deal’ or opportunity to purchase a home, they will bypass their own normal, conservative deliberations to ’snap up’ a home these days.

Home sales between July 2020 and June 2021 sat on the market for a median period of only one week before going under contract, according to a survey released last week by the National Association of Realtors. That is down from three weeks a year earlier and marks a record low in data going back to 1989.

The rapid turnover helps explain how the number of homes sold rose to multiyear highs during the Covid-19 pandemic, even as the inventory of homes for sale remained stubbornly low. The pandemic helped spark the biggest housing boom in more than a decade. Buyers that kept their jobs sought more space to work remotely and took advantage of low mortgage-interest rates. Many households also saved more during the pandemic and benefied from a rising stock market.

At the same time, supply has been constrained. Caution about showing homes during Covid-19, a reluctance among some owners to enter the competitive housing market and the ability to refinance at low rates kept many prospective sellers from listing their homes.

In such a fast-moving market, buyers have little time to commit to one of the biggest purchases of their lives and sometimes forego traditional safeguards. Many buyers have waived their rights to terminate a contract because of a low appraisal or unfavorable inspection to make their offers more competitive in a bidding war.

I caution my clients they are making an ‘investment of a lifetime’ and to be careful before making a final decision without carefully considering all of the ramifications of what that purchase will have on their lives for their future. I do understand the ‘panic’ that can set in with some clients — many of whom have been so frustrated in losing in bidding wars or simply not being able to find their dream home.

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Real estate investors aggressive in Q3
Investors continued to enter the market in droves during the third quarter of 2021, according to a report released last week. A record 18.2% of U.S. homes purchased during the quarter were snapped up by investors, up from 16.1% during the second quarter and from 11.2% the year before.

In total, investors bought 90,215 homes during Q3, an increase of 10.1% from Q2 and an increase of 80.2% year over year, marking the second-greatest annual gain ever recorded.

Risk of heat or storms haven’t deterred investors from purchasing homes in these high-risk areas. More than 65% of investor-purchased homes in the third quarter had a high heat risk, and about 64% had high storm risk. Just 27.1% of homes purchased faced high drought risk, 22.2% high flood risk and 3% high fire risk.

There seems to be no stopping investors who look at real estate as the single, most attractive investment, especially with the market suffering from the recent Covid variant from South Africa. Are we going back to the early pandemic days of 2020? Too early to tell, but real estate still remains high on every investor’s list.

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Surge in rental housing development continues
Home builders and other real estate companies are increasingly betting that would-be home buyers frustrated with a shortage of homes for sale and runaway prices will settle for renting their slice of the American dream.

Although individual homeowners and mom-and-pop investors still account for the vast majority of single-family rental homes, home builders have stepped up construction this year of new houses for rent.

In the third quarter, builders’ broke ground on 16,000 single-family homes slated to become rentals. That’s the highest quarterly total of housing starts for built-to-rent homes going back to at least 1990, according to an analysis of U.S. census data by the National Assn. of Home Builder

The trade association’s analysis includes only homes that builders are going to hang on to and rent out. That excludes homes being built to be sold to real estate investment trusts or investors planning to rent the properties.
Rents for U.S. single-family homes jumped 10.2% in September from a year earlier, according to real estate information company CoreLogic. The firm excludes apartments from its single-family home rental data, though it includes condominium and townhome rentals.

CoreLogic expects rents to continue climbing through at least the end of this year, citing strong demand, low supply of homes for rent and a strengthening job market.

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A Peak into my world
First a bit of personal sharing. As most of you may recall, my Mom passed away in June of 2020, and due to Covid my sister had not been able to come here until Sept of this year. Prior to that, she and our beloved caregiver/housekeeper for the last 40 years, over FaceTime went through EVERYTHING in Mom’s house and determined how things would be disbursed. It was an horrific job as Mom kept everything.. But they finally got through it and had items separated and packed up. Finally, this past Sept, my sister and brother-in-law were able to come here and have done so for the past 3 months, staying for two weeks at a time reviewing all of the boxes and making a detailed inventory of what was being sent to Canada and what is staying here.
That chore is in the final stages of being done, and now we are ready to sell the house to the buyers who have been waiting for us to get to this point.

Spending all of this time with my family has been wonderful, more than we have been able to do in years and created a wonderful relationship for us to grow. It will be sad to see the house go to new owners, as my sister and I both grew up in the house, but we know, that the new owners will be very happy raising their young family there.

As for work, I am busier than I have been in a long time. Buyers who are thrilled to have found a home to purchase and jumping through hoops to deal with multiple offers and prevailing. Sellers who are dealing with buyers and some of their at times unreasonable demands.

Currently I have one home in escrow where I am representing the Seller, and we have two back up offers, and on another where I am representing the Buyer there are two back up offers. The shortage of inventory is creating stress for all. We simply need more homes to sell. The buyers are definitely here. I have another buyer who is making an offer on a home in Santa Monica, and while we don’t know how many offers there will be when the sellers review the offers, I can only imagine there will be more than 10 as the open houses have been packed with potential buyers. I hope my client prevails as it is GREAT house and has her name all over it.

As we head into the strong holiday season, it is fun to show homes that are decked out in their holiday decorations. It creates such a warm and homey feeling and makes it easy for buyers in see themselves living there. Contrary to common thought, the holidays have not slowed the market down at all. My loan officer told me yesterday that he had 11 openings for loans yesterday after the Thanksgiving holiday weekend!!!!

The market is still very strong and hot! And mortgage rates are low, still!!!

Happy Hanukah ! Stay Healthy and Safe Travels!

The SchifferLine
Timely Real Estate News……………………15  November 2021

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Sales volume zooms upward 62%
Compared to a year ago, sales volume for 2020 is up 62%, which underscores the buying frenzy in today’s hotter-than-hot real estate market. Will it slow down? Perhaps, but it does not appear likely in our neck of the woods. We have made incredible strides in sales volumes for the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood, which saw sales volume at $5.005 billion through October 2021 compared to $3.077 billion at the end of October 2020. That is just amazing to see these numbers continue to accelerate upward. There were some whopping sales prices which I will get into a little later.

What is notable is the nearly $2 billion increase over last year at this time reflects the strong attraction our homes and neighborhoods are getting from buyers everywhere. Multiple offers are still happening (I have been involved in two in the past week alone!) so, buyers beware — expect to stand in line, and be prepared before entering this market. What does it mean to be prepared? – have a pretty good idea of what you want to buy, where you want to live, and have most important pre-approval letter in hand, along with a great agent to get you where you want to go.

Beverly Hills led the pack with a $854 million sales volume increase over the previous year, which is almost $1 billion more….Brentwood was over $488 million, Bel-Air/Holmby Hills was up $230 million, Westwood/Century City — $212 million, and Beverly Hills Post Office up $175 million.

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Median sales prices increased in October, too
Not to be outdone, median sales prices are also showing greater signs of increases across all the communities I report on. Notably, all five communities’ median sales prices were significantly up this month compared to same time last year. Beverly Hills was best ever — $7.500 million median sales price for a single family residence or 16% for the year…BPHO was up 13% at $3.397 million, Bel-Air/Holmby Hills was up the best so far — 26% — to $2.331 million; Westwood/Century City was up 10% to $2.411 million, and Brentwood, was up 18% to $3.837 million.

These median sales price increases represent the largest leap in years as buyers are grabbing homes quickly. If homes are priced competitively, they’re going to move quickly, but while prices are up, we also saw last month a significant lag between original sales price vs. final sales price, with Beverly Hills showing 85% of its OSP vs it final selling price. BHPO was at 89%; Bel-Air/Holmby Hills was at 90% and Brentwood was at 95%. Only Westwood/Century was at 100% — a testament to this Westside powerhouse community. What this means is sellers are much more optimistic about what their homes are worth — off by as much as 15%. The house is worth exactly what someone is willing to pay for it and what the seller is willing to sell it for, and while there is a buying frenzy going on, buyers are not stupid. The do their research and in today’s data-driven world, which is no surprise. I know — I deal with very demanding, sophisticated buyers every day!

Pushing the sales #s was Beverly Hills, again, with 9 homes selling over $10 million, the largest was $63 million, and two in the $20+ million range. BHPO had one for $10 million and Bel-Air/Holmby had two over $10 million. But mostly, the
tremendous overall increases in pricing and sales volume were homes that were selling for under $10 mil

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Westside high-end sales are up…Way Up!
So, what is behind the continuing surging sales volume on Los Angeles’s Westside? This year marks the best ever in high end sales…the number of closed sales of $5 million-plus so far this year are 939, versus 569 at this time last year, up 90%. Of these, 313 were $10 million-plus this year and there were 165 $10 million-plus sales at this time last year, up 90%. 87 were $20 million-plus this year and there were 46 closed sales of $20 million-plus at this time last year, up 89%.

We are ahead in sales of $30 and $40 million-plus as well….Of the 87 sales of $20 million-plus, 28 were $30 million-plus, versus 13 at this time last year up a whopping 115%. Sixteen (16) were $40 million-plus and there were six currently last year, up 166%.

There are 128 pending sales of $5 million-plus now and 43 are $20 million-plus. Of the 87 sales of $20 million-plus, the buyers are mostly American — 71 or 82%. The other buyers are: 2 from Denmark, 2 Chinese, 1 S. African, 1 from India, 1 Saudi Arabian, 1 from England,1 Indonesian and 1 Canadian. The other six were not identified.

The areas of the sales are: 23 in Malibu, 22 in Beverly Hills, 8 each in Palisades and Bel Air, 6 each in BHPO, Brentwood, Holmby Hills and Sunset Strip and 1 each in Westwood and Santa Monica. Of the 87 sales of $20 million-plus, 34 were not listed at the time of sale or 39% unlisted. This is another “Wow” month for Westside sales.

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We saw it coming…Zillow closes home-flipping unit
Realtors and agents across the U.S. were not surprised to see Zillow pulling the plug on its tech-powered home-flipping operation after deciding that its pricing algorithms weren’t accurate enough to build a stable business. The company plans to take write-downs of as much as $569 million and reduce its workforce by 25% as it winds down the business in coming months as reported in the Wall Street Journal.

The decision comes as the company’s third-quarter results showed it lost more than $380 million in the flipping operation, called Zillow Offers. The business hit a major snag in recent months as the company’s algorithms caused it to overpay for houses just as the heated U.S. market began to cool slightly, forcing it to list properties at a loss.

As an experienced real estate agent for more many years on Los Angeles Westside, I have witnessed so many homeowners thinking they can get from 8% to 10% more than what the comps were showing and what was my professional estimate…”but Zillow says…” Well, that came a halt, finally, after the company’s ill-conceived home flipping suffered gigantic losses. Zillow estimates never had any traction with seasoned real estate professionals.

The company expects to buy roughly 9,000 homes in the fourth quarter and said it will take a write-down of as much as $265 million on home purchases that will close in the final three months of the year. The verdict is not in as to how Zillow is going to survive this. Many times, I have told the story, which I believe to be true that the owner of Zillow, based on their “Zestimate” bought his own home here in Brentwood and over paid because of the inaccuracy of the Zestimate. It has been very effective in getting my sellers to list their homes based on the comparable’ s I have presented them with.

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Higher home prices help those in ’trouble’
Trouble, we have trouble….or do we? The good news is that homeowners are keeping up with their mortgage payments or arranging for loan modifications with their service providers. But housing analysts say that while the real estate market still faces pandemic-related fears about a wave of delinquencies, higher home prices are helping to alleviate some of those concerns. The overall delinquency rate fell to the lowest level since the onset of the pandemic, CoreLogic, a real estate data firm, reports. “However, the decrease in delinquencies masks the serious financial challenges that a part of the borrower population has experienced,” Molly Boesel, economist at CoreLogic, writes for CoreLogic Insights.

“In the months prior to the pandemic, only one in five delinquent loans had missed six or more payments. In August 2021 one in two borrowers with missed payments were behind six or more months. Fortunately, large increases in home prices [have] given most borrowers a large home equity cushion, making foreclosure far less likely.”

The nation’s overall delinquency rate was 4% in August, which reflects homeowners in some stage of delinquency, considered to be 30 days or more past due on their mortgage payments, according to CoreLogic. That is a decrease of 2.6% from August 2020. Delinquencies, however, are still slightly above the early pre-pandemic rate in 2020 of 3.6%.
This is, indeed, good news. Still looming of course, is the eviction issue which has not gone away, at least in California. We shall s

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Will inflation have a negative impact on rates, sales?
As I have mentioned in previous SchifferLine editions, the Fed is expected to raise mortgage rates next year. The latest rise in inflation helps to explain why investors are increasingly asking not whether the Federal Reserve will raise interest rates next year but rather how much and how quickly it may do so.

The Labor Department reported Wednesday that consumer prices rose strongly in October, up 0.9% on a seasonally adjusted basis from the prior month. Over the last 12 months, inflation is up 6.2%. So-called core prices, which exclude food and energy items, rose 4.6% over the past year. Both are the largest annual increases in more than 30 years.

The figures highlight why Fed officials have been backing away from characterizing recent price pressures as “transitory.” Even though senior central bank leaders still believe inflation should slow as supply-chain kinks abate, they now see that process taking longer than they expected earlier this year, extending into 2022. That is in part because the spread of the Delta variant of the coronavirus has extended a series of disruptions in the economy.

Based on previous Fed rate increases, we can expect mortgage rates to increase, but with the latest rounds of data released by the Commerce Department, mortgage rates have actually gone down below 3% again. We did not see a bit hit when the Fed raised rates, so perhaps, we won’t again. But do not bet on it. I recommend if you are looking for financing, do it now.

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Renters who left town, come back to “sticker shock”
So much for waiting for the dust to settle. While many think they see the light at the end of the pandemic tunnel and return from their rural adventure, they are shocked to see how rental prices have move upward, to many, out of reach.

According to the Wall Street Journal, it turns out you cannot go home again. At least, that is the case for many of the Americans who left their homes in major metropolitan areas during the pandemic, relocating to the countryside for more living space and access to nature.

Now they are returning in droves as vaccines become more widespread, employers call their workers back to the office and schools reopen for in-person instruction. They are arriving to find bidding wars and skyrocketing prices in their former neighborhoods, where everyone now wants the same things: outdoor space, a home office, and move-in readiness. In Los Angeles, rents have increased 10.4% over the past year. Only a handful of large cities, such as San Francisco and Minneapolis, still have rents discounted from pre-pandemic levels.

Welcome home

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Brentwood — one of America’s favorite places to live
Brentwood, 90049, is nestled in the foothills of the Santa Monica Mountains. Some of the homes have commanding
views of the city, stretching from Beverly Hills to Malibu and the Pacific Ocean. Home to many celebrities in entertainment, media and the corporate world, Brentwood is adjacent to thriving Santa Monica and Pacific Palisades to the West and Westwood and Century City to the East.

Noted for its small-town, country-like atmosphere, Brentwood features a wonderful neighborhood of shops, fine restaurants, and an active lifestyle of sports enthusiasts who jog up and down beautiful San Vicente Boulevard in the meridian to nearby Santa Monica Beach.

What makes the various Brentwood neighborhoods so charming are its tree-lined streets and magnificent homes. Many streets, for example, do not have sidewalks. There truly is a country feeling, a sophisticated casualness about the community. But Brentwood residents are full of pride and very protective of their community and lifestyle.
The community’s larger homes and estates are usually found north of San Vicente or world famous Sunset Boulevard along streets that meander up to the foothills and through the canyons of the Santa Monica Mountains. Upscale apartments populate the area south of San Vicente, intermingled with shops and restaurants.

Brentwood is also home to several, highly rated private schools – The Brentwood School and Archer School for Girls, two the most prestigious schools in California, plus the community features one of the finest public education systems within the city.

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How am I doing you say?
Life is busy and interesting! My sister & brother-in-law have been here two weeks, two weeks off working in Mom’s house getting it ready to sell. They have done a tremendous and enormous job. We are almost there and have 3 or 4 potential buyers we are working with. Having them stay with me has been great and fun, and I really miss them when they are back home.

Work has been keeping me hopping and “the busy holiday season” has not made a dent in my working seven days a week, nonstop. I love it but am also looking forward to taking a little time off and taking a breath or two. As you may recall, I am a mentor to new licenses, and one of them has an offer on his first listing. It is such a joy to me to see the excitement and zest for learning and accomplishment in putting a transaction together. Unfortunately, I do not think this offer will come together, but working with him and guiding him to widen his horizons is for me what this is all about. It is the same as meeting someone new who comes to me as a buyer or seller and adding more dimension to my life.

I have one listing in Mountaingate that we thought we had sold, but unfortunately it just fell out of escrow, again, (which is a common occurrence today), however we put it back into escrow two days later, and I hope it sticks this time. I am as always looking to find properties to fill my large pool of buyer’s needs, so again, I you are at all thinking of selling, please do contact me.. Carole Schiffer – 310 442-1384

I hope you have a wonderful and restful Thanksgiving with your family and friends. Would love to hear how you celebrated the holiday with it being the first time in a long time that we can be with family and friends again.

Take care – stay safe and ENJOY!!!