Timely Real Estate News……………….15 December 2018
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                                     Merry Christmas and Kwanza!
It’s a joyous time of year. I love the joy of the holidays and rejoice in the good fortune I have had this year. However, you celebrate the holidays. I want to wish each of you the warmest of holiday greetings, and I look forward to seeing you in 2019!
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Housing market stumbles along…
I wouldn’t say that this month’s stats are like all the others, it just feels like it. Median sales prices in some communities are up, some haven’t moved the needle this year, and one is down. For the five communities I report on each month in The Schiffer Line — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood, sales volume remains stuck in low gear, 6.6% behind last year’s volume. Impressive, though, is that sales volume is $3.2 billion though November, but down compared to $3.5 billion a year ago.

That is to be expected. We are seeing a lot of buyers at open houses, and I had my best month of the year this December, but higher interest rates, high prices, and continued low inventory plague our Westside housing market. We are not alone. Basically, it is the same picture across the country today and with the stock market with its highs and lows from one day to the next, we end the year curious as to what the new year will bring, but also know that we here in West Los Angeles are still in a strong housing market.
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Median sales prices inch higher
November turned out to be an unusual month regarding median sales prices. Usually, I’ll see three communities up, two down, and then vice versa the next month. But looking at MSP through the 11 months for 2018, Only Bel-Air/Holmby Hills has moved ahead of the other four cities — with a 18% increase in median sale price, resting at $2.715 million, over last year at this time. Two cities — Beverly Hills — at $6,000 million, and Brentwood, at $3,187 million had “no increase” …Westwood/Century City was up a meager 1% to $2.278 million. Beverly Hills Post Office was down 16% compared to last year at $2.767 million. Culver City, one of the cities I also serve was up 9% in median sales price, at $1.310 million.

I regard year-to-date median sales prices as the best barometer to understand what’s trending on the Westside. As we near the end of 2018, the housing market is in somewhat of a flat mode’ from an MSP perspective. We are not moving the needle much, and it’s not the buyers’ fault., they are there, but in somewhat of a more cautious mode. On the other hand, we are still seeing some rather large sales in our communities.

For example, Beverly Hills had three homes over $10 million sold in November, Bel-Air/Holmby Hills had two large sales of $19 million and $20 million. But at the same time, we’re seeing substantial drops in sales volume — Beverly Hills was down over $140 million in total sales through November compared to a year ago. BHPO was down $80 million in volume, Bel-Air/Holmby Hills was down $60 million and Brentwood was down $9 million. Only Culver City was up $67 million from 2017. Please remember that these numbers also only reflect the sales through the multiple listing service, and as such do not include any private sales.

One of the things I do every day is to run a “hot sheet” from the MLS for all of the transactions on the Westside. This includes new listings, price reductions, properties going into escrow, and closed escrows. The categories include single family residences, condos, leases, and land. With very few exceptions, I am still seeing about 60 % properties in all categories close escrow at either over asking price or at the asking price. In fact, I just closed escrow on a home in Bel Air for $26,000 over asking!

As I have reported in previous Schiffer Line issues, economists are predicting a flatter 2019, with the GDP coming in a 2% and at 1% for 2020. However, a solution to the trade tariff wars going on now with China and steady interest rates, we could see a nice bump next year.
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Understanding fires and their aftermath…
We have a habit of taking for granted that there will always be a fire season, except now, with the change in weather patterns, etc. fire season is an all year-long event. What we really haven’t focused on is what happens to these scorched lands after the fires are put out. As reported recently in the Los Angeles Times, there is a fascinating lesson to be learned in what happens to the blackened soil.

For example, the likelihood of runoff and erosion doubles after fires in urbanized areas, because recently scorched soils become hydrophobic, meaning they repel water. Fires cook the waxes that are natural to our soils. When these waxes cool, they coat the first inch of soil with a repellent layer, stopping water from infiltrating the soil.
So, when the rains come, instead of soaking into the ground, the water streams over the top, jamming storm water drainage systems with mud and debris and sending torrents of runoff into yards, streets and even homes, as with the devastating mudslides after the Thomas fire in Montecito that killed 21 in January.

Although most soils lose their repellency within a year, some may stay hydrophobic for up to six years, depending on the fire’s intensity and the size of a soil’s particles. Please resist the urge to dump mulch on the property. It won’t stop erosion, but it will stifle the new growth of weeds and other seeds that are crucial to holding the damaged soil in place. We have much to learn about our Earth and how we manage our communities and growth.
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Go Native. Protect natural soils.
We live in a semi-arid desert. It is called Los Angeles and its environs. You wouldn’t think that when you drive by neighborhoods where there is much vegetation and beautifully landscaped gardens and lawns. How can we transition to a more user-friendly environment?

A couple of things: 1) Plant native now according to the California Native Plant Society. If you’re in a scorched area, protect the fragile soils, feed and shelter displaced creatures, and discourage future fires. 2) Don’t jump to re-landscaping with non-native plants as that will prevent the natural healing in the soil and by planting native plant material. You will be protecting the habitat for animals displaced by the fire. They’re homeless, too.

As the Plant Society points out, Cleveland Sage, a.k.a. Blue Sage, is one of the most fragrant native salvias, drought-tolerant, great on hillsides and highly popular with hummingbirds and bees. Shrubs like lemonade berry, coffee berry and Christmas berry are like supermarkets for birds.

Unlike many invasive species, California’s dry climate forced native plants to develop deep root systems so they can find water far in the ground. That extensive root structure also keeps hillsides stable and soil from washing away. So, whether you’re facing re-landscaping or thinking about what to do next with your property, Go Native.
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Homeowners stress out…home repair challenges
DIY is a popular theme today. Doing It Yourself may sound like the perfect solution for your home repair needs, but in a national survey, it is not working out that way. It was found that owners stressed out from surprise home repairs.

In the first year of ownership, 44% of homeowners say they experienced an unexpected home repair. 12% said they experienced a surprise repair within their first month of moving in, according to a new NerdWallet survey of about 2,000 U.S. adults.

Nearly half—or 48% — of surveyed American homeowners say unexpected home repair costs have caused them anxiety. 31 % of homeowners say they do not have money set aside for home repairs or improvements.

The survey also revealed that many homeowners who wandered down the DIY path had nightmares, losing sleep, not to mention money for screwing up what might have been a simple job for an expert.  The survey concludes — keep an emergency fund, hire experts for more-than-simple tasks, and do your regular maintenance to insure you don’t experience costly repairs.
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Keeping a watchful eye….
One of the many lessons I have learned throughout my real estate career is the importance of home maintenance. Many times, we get used to conditions in our homes, and neglect taking care of them, and trust me that neglect can sometimes come back and bite us.

These items can include cracked windows, windows or doors that don’t close properly, a leak from a toilet when the toilet/leak is fixed but any water that might have run downstairs or into the walls could develop mold. Getting a regular termite inspection, maintaining your roof and paint. These are some of the items that we as homeowners should be checking and fixing on a regular basis.
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Holiday Wishes
With the holidays here and amid the rush of shopping, parties, entertaining, and

spending time with family and friends, we don’t always take the time to just stop and smell the roses. Please enjoy all that our life gives us….it is so short.

I hope you have a wonderful holiday and all of your wishes and prayers come true!
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What’s coming up?

Come the first of year I have some new listings for lease or sale.

Keep checking out my web site: caroleschiffer.com and my free app if you are curious to know what the house next door is selling for or if you just want to keep track of what’s going on in your neighborhood.

 

Timely Real Estate News……………………………..1 December 2018
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Fires affect home price growth in September
Home price gains slowed to 5.5% in September, year-over-year, according to the latest S&P CoreLogic Case-Shiller National Index. Year-over-year growth was down from 5.7% last month and the second time in 12 months price gains fell under 6 percent.

Supply and demand are falling into balance in the housing market according to Ralph McLaughlin, deputy chief economist and executive of research and insights for CoreLogic. “On the supply side, slow but steady growth in inventory is providing relief to homebuyers. On the demand side, years of price growth outpacing income growth, as well as rising mortgage rates, is making the cost of buying homes increasingly expensive.”

The western region led the way in gains, with Las Vegas up 13.5% year-over-year price, followed by San Francisco with a 9.9% increase and Seattle with an 8.4% percent increase. This is the second straight month where price gains in Seattle fell below 10% after years of leading price growth among the cities tracked. September marked the seventh month of flat or decelerating home price growth as the housing market settles into a slowdown.
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Women ahead in battling for home ownership
Women appear to be winning the battle with men as to who wants to own a home the most. According to Bank of America’s latest homebuyer insight report, women are “out-buying men”.

Single females not only value homeownership more than single males — 73% to 65% — they also place a higher priority on saving for a down payment — 65 % to 55%, according to the report’s spotlight on single female buyers. They also prioritize improving their credit scores more than unattached men, 49% to 42%.

Single women are confident in their abilities, but they are still having a tough time saving for a down payment. Nearly half haven’t taken the leap into ownership because they haven’t put away enough money. Another factor delaying their move: They are more likely to feel overwhelmed by the prospect of ownership than single males, 40% to 30 %.

Nearly 60% of future buyers are now planning to hold off until prices subside. Even those folks who want to move up from one house to another are waiting for “a meaningful correction,” the survey found. And 14% said they’d drop out of the market altogether if a correction fails to materialize.
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Homebuyers making compromises….
We don’t always get what we want in life as it is in real estate. In California’s competitive housing market, homebuyers are making compromises in their home purchases including price, size, location, and school quality according to the latest survey by the California Association of Realtors.

CAR examined the attitudes and behaviors of real estate consumers, revealing 44% of buyers bought a more expensive home than they wanted, 33% purchased a smaller home than desired, 36% purchased a home further from school/work than wished, and 30% purchased in an area where schools were of lesser quality.

According to CAR, well-qualified home buyers “understand that buying a home can be challenging in a competitive housing market environment and they may not be able to buy the ideal home they want.”

Surprisingly, buyers were not deterred by higher home prices and tight housing supply conditions but waited until their financial situations improved or to save for a down payment. Depending on the region where they live and the prices of the homes in that area, buyers typically saved for five years, and nearly a quarter of those who purchased a home priced $1 million or higher saved more than 10 years.

The source of down payment for the majority of home buyers was their personal savings. Boomers were more likely to use the proceeds from the sale of a previous home since many were repeat buyers. Millennials were significantly more likely than Gen Xers or boomers to use funds received from parents or family or a gift.
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Apartments getting smaller, costing more
Surprise, surprise, surprise! Apartments are springing up everywhere, but they’re smaller than before and cost renters more. The average size of newly built apartments in 2018 is 941 square feet, which is 5% smaller than it was a decade ago. For studio apartments, the change is more pronounced — they’re 10% smaller. Rents, on the other hand, have jumped 28% during the same time period, according to RENTCafe, a nationwide apartment search website.

Changes in renters’ living habits are literally redrawing floor plans according to the survey. The largest share of apartment dwellers, Millennials, prefer living in locations close to restaurants and entertainment, rather than having a large kitchen or living room to cook in or to entertain at home. This comes as no surprise in the Los Angeles area, where housing prices have kept most Millennials out of the home-buying market.
Higher rental costs today, however, have millennials looking for savings by renting smaller units, and developers are clearly responding. Micro-units are becoming more popular, following on the tiny-house trend, as millennials tend to be more environmentally conscious than previous generations. Apartment developers are supplementing the smaller units by adding more common area spaces to their buildings, in which residents can both work and entertain.
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Feds significantly expand probes into all-cash deals
It was bound to happen — the federal government is expanding its investigations of all-cash real estate transactions. Title insurance companies in 12 of the nation’s largest markets, including Los Angeles, will now have to provide federal authorities with substantial details on all real estate transactions of $300,000 or more if the buyer is paying all cash.

The requirement comes at the hands of the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), which is pushing investigations into whether foreign buyers are using shell companies to buy U.S. real estate in order to launder money.

The investigation has been going on for almost three years and has been expanded several times. The results of that initial investigation showed more than 25% of transactions covered in the initial inquiry involved a “beneficial owner” who is also the subject of a “suspicious activity report,” which is an indication of possible criminal activity.

The initial investigation also led FinCEN to expand the probe to include all of New York City, Los Angeles, San Francisco and several other areas. The investigation was later expanded again to include wire transfers. Going forward, title companies in Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle will all be required to report on the person behind shell companies on all-cash transactions of $300,000 or more.
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CA wildfires bring big changes to real estate
The effects from the recent Camp Fire and Woolsey Fire extend far beyond the severe damages inflicted on more than the loss of life, property, and much valued forestry and natural habitat. Here are five challenges California’s housing market is facing now. 1) Deepening housing crisis continues in both Northern and Southern California. The state has fallen short with 80,000 new housing units each year as supply has not kept up with demand…and the displacement of families resulting from nearly 14,000 homes lost in the last two months just exacerbates the crisis. There are no simple solutions, and many are being forced to leave the state altogether. 2) Diverting labor required for new housing. Another severe impact will be longer term. Skilled labor continues to be an urgent need for California’s housing industry. Many skilled workers are moving out, and with areas such as Santa Rosa and Paradise facing a minimum of 10 years of rebuilding, labor is going to be short supply. This diversion from new housing will be felt for some time. 3) Increased building costs. Everything is going up — lumber, concrete, and materials needed for building or rebuilding homes is affected. Costs-per-square foot after the Wine Country fire jumped dramatically. And insurance companies didn’t always cover the higher costs of rebuilding. 4) Challenging insurance companies. Insurance companies have one goal – minimize risks and payouts. Expect major policy changes (read the fine print at renewal time) and premium increases that are here permanently. Already, many insurance companies are pulling out of these disaster areas and/or California. This is a state-wide problem. 5) Changing future building codes. Many argue for severe restrictions on approving building in known fire or flood zones, and some go as far as wanting a ban on housing in fire prone areas. Those cities affected are already the questions of what do we next to prevent the severe loss of property and life?

All of these challenges are sitting in our lap right now. It’s going to take time, patience and innovative planning to deal with these crises, which we seem to face every year. These recent fires are, indeed, permanently reshaping the face of real estate in California and in the rest of the U.S as well!
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Make sure you have the proper mask….
One of the realities many of us have faced with the horrible fires in Los Angeles & Ventura Counties, has been how to deal with not only the fires, but the smoke and bad air quality throughout the blaze and afterward.

The Woolsey fire, which consumed more than 98,000 acres, causing 3 deaths, and 1,500 structures having been destroyed, generated air quality warnings across Southern California. Smoke and bad air from the Camp Fire in Paradise, CA, has been traveling across the US and reaching the East Coast.

Residents scrambled to get masks to avoid inhaling toxic pollutants in the air during and after the Woolsey fire, and the fact is that health professionals and firefighters were fitted for the right mask, but the general public was not. Bottom line: You need the right mask.

The California Governor’s Office of Emergency Services and the California Department of Public Health recommend N95 respirators or P100 masks, both of which are approved by the National Institute for Occupational Safety and Health for use by healthcare workers and firefighters.

Some health experts recommend N95 respirator masks to help protect against wildfire smoke. Simple dust or surgical masks do not offer the same kind of protection. Many locations quickly sold out of the N95 mask after the Woolsey fire started…best you get one for each family member now — Home Depot, Amazon.com, CVS, Walgreen’s are some of the more accessible store locations. They cost from $8 to $16. There are also many concerns about the search for lost items as there are many toxins in the charred items that are being moved around in the search for lost items.
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Santa came early to Wall Street
Not many were expecting Santa to deliver a present for Wall Street this early, but Fed Chairman Jerome Powell apparently placed one under the tree by calming the market’s fears of more interest rate hikes. Powell was mostly upbeat about the U.S. economy, forecasting continued solid growth, low unemployment, and inflation near the Fed’s 2% annual target.

A slight indication was given by Powell that interest-rate hikes were not necessarily coming in December, stating that there is a great deal to like about the outlook for the economy. And he, and other Fed officials indicated there was no pre-set policy path. Although Powell didn’t exactly state there were not going to more Fed hikes, investors took his remarks as good news. Powell stated the Fed will wait to see the data.

Another component of the good news, is that the Federal Housing Finance Agency gives 2019 homebuyers a break with a 6.9 percent increase in the max loan amount Fannie Mae and Freddie Mac can purchase. Homebuyers will be able to afford a little more house at a slightly cheaper rate next year thanks to the boost.
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Searching, Searching!
I have a number of buyers for homes in both Bel Air Crest and homes in Mountaingate. One Mountaingate buyer is very specific in that he wants a golf course view, specifically the south course view. Another Bel Air Crest buyer wants/needs to have a home with an elevator (Canyon home only) All of these buyers are currently renting, and have nothing to sell, so if you are at all thinking of selling your home, and don’t want the hassle of the tradition open houses, etc., please let me know and perhaps we can make a happy marriage.
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How was your Thanksgiving? Mine was somewhat on the quiet side as I primarily spent it with my Mom and got some much-needed sleep. It seems I have been on a treadmill the last few weeks and I was soooo very tired, my bags had bags! My sister & her family are coming for the Christmas holiday and I am very much looking forward to seeing them all and spending time with them.

With the horrible events of November hopefully behind us, and now we are dealing with the rains and hopes that there is no more damage because of the burn scars, I am so very grateful for all that is my life,, my family, friends, colleagues, business and its associates.

Please do not forget to check out my free app if you are curious to know what the house next door is selling for or you just want to keep track of what’s going on in your neighborhood

I hope you have a great holiday celebration starting with Hanukkah this coming Monday.

Timely Real Estate News…………………………15 November 2018
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Thoughts & Prayers
My heart breaks for all of the losses, pain and sorrow that our beautiful state has suffered in the last week! With Thanksgiving coming up next week, Hanukkah nine days later and Christmas 22 days after that, I am once again reminded of my gratitude for all of my family, friends and clients and my wish to Thank You for your generosity and support and to re-in force my wish to give back. With the tragic impact of the mass shooting in Thousand Oaks followed the next day by the fires in Northern and Southern California, we can only hope there is no further serious loss of life and property.
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Fires overwhelm us…the fight continues
Over the past week, we have been witnessing chaotic fire conditions as fires rage from Thousand Oaks to the sea, destroying thousands of acres, hundreds of structures and causing at least three deaths in the Woolsey Fire. We are seeing friends, family, and literally thousands forced to evacuate as many have lost their homes. I personally have three or four friends as well as a number of colleagues from Coldwell Banker who have suffered the loss of their homes already — in both the Woosley fire as well as the one in Paradise, which has now become the deadliest fire in California history with 56 deaths as of Thursday the 12th, and unfortunately the counting goes on.

Our outstanding fire fighters are stretched thin as are the other emergency resources, shelters and available homes for those who are now homeless to lease. Coldwell Banker has launched massive relief efforts including collecting funds, clothing, and any other items one may be able to donate. We have secured a large yacht which is sailing out of Santa Monica to Santa Barbara loaded with supplies. If you have any items you wish to donate, please let me know and I will be more than happy to come by and collect them. I am proud to share that my fellow board members of the Coldwell Banker Residential Community Foundation have donated $35,000 in the last week to the Ventura County Community Foundation as well as the Greater Fund for the relief for the fire victims in both Los Angeles and Ventura Counties. All of these funds have come from my fellow agents and I making monetary donations.

What is our defense? According the Los Angeles Fire Department, there are many pro-active steps that each homeowner can take right now. The LAPD recognizes that fire season is no longer confined to the dry, fall months — it’s here to stay all year long. Therefore, homeowners, especially those in canyons and mountain areas of LA county, should heed the warnings and advice of the LAFD to protect themselves.

The Los Angeles FD has a simple program to help prepare you — Ready! Set! Go! …. Ready! — get your property in order by clearing brush a minimum of 100 feet from the home…make sure tree limbs are not hanging over your roof, and clean out the gutters. If you can install gutter guards, that will keep the leaves and other debris from gathering in the gutters. Also, there are shields that go on the vents of your home, they will prevent the flying embers from getting into the attic of your house (believe it or not, that is one of the major causes of houses catching on fire) Replace wood shingle roofs with tile or fire-resistant materials. Remove flammable materials from around the house, including patio furniture, fire wood, and any decorations that might catch fire.

Prepare emergency supplies — medicines, device chargers, computers, food for pets, etc.…. plan thoroughly for your exit with clothes and food stuffs. Also, plan on minimum of two exits. All of these steps should be discussed with family members, and immediate action to assemble an evacuation plan is critical to your family’s safety. (Two of the communities with whom I work with closely — Bel Air Crest and Mountaingate — have Emergency Preparedness plans in place, and Bel Air Crest does have an automatic emergency phone contact program as well as its own water truck!)

Get Set! — If a fire threatens, the LAFD recommends back your vehicle into the driveway…roll up the windows, load your vehicle with everything you want to take. Have your evacuation kit and supplies handy for a quick exit. Make sure you have the items you have deemed critical ready for transport. You may only have a few minutes warning, so expediency is paramount. I don’t know about you, but I have been packed up and ready to go since the fires broke out last week.

Go! — Keep heads up on evacuation orders. You should not wait to be told according the LAPD. Go early! Discuss all of this with family members ahead of time and have a plan on where to meet in case of evacuation. Please visit the LAFD video presentation: http://www.mysafela.org/ready-set-go.

I don’t have to tell you to be aware of fire dangers — the fires in our local history have taught us to be vigilant. Fortunately, we have an outstanding Los Angeles City and Los Angeles County Fire Departments that have really been stalwarts in fighting these menacing forces. Heed the warnings and always be — Ready! Set! Go!
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Fire insurance policies are not all equal…read fine print
The Los Angeles Times reported this week that not all fire insurance policies are equal and while the vast majority of California homeowners have insurance that covers fire damage, that doesn’t mean you can breathe easy.

Property insurance lawyers say it’s not uncommon for insurers to do everything possible to minimize payouts, especially after catastrophic blazes such as the ones now raging in Northern and Southern California.

“In a mass loss, they’re looking at their overall payments,” said Joshua Haffner, a Los Angeles lawyer specializing in fire-related claims. “They’ll do what they can to keep payments down. And they’re getting very smart about paying less.”

He said many homeowners may not be aware that property insurers have been slipping provisions into people’s policies limiting coverage for damage caused by smoke and ash.
In major fires such as the ones now burning throughout California, hundreds or even thousands of homes may be consumed by flames. But thousands more can be damaged in large and small ways by plumes of smoke and ash traveling for miles beyond the burn zone.

Some policies may require homeowners to report any such damage within 90 days to qualify for coverage. Others may cap coverage at a certain level, frequently $5,000.
Such provisions often are inserted into policies during routine renewals. Although all changes must be disclosed, many homeowners may not pay attention or may not read the fine print. It behooves all homeowners to review their policies in detail before every renewal. Talk with your insurance agent for their input and advice.
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Sales volume straining to get even, still no cigar
Sales volume is inching toward getting even with sales for the previous year, but it didn’t happen in October. For the communities I report on regularly in The Schiffer Line (Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood), sales volume through October was $2.977 billion compared to $3.147 billion through nine months of 2018. That’s a 5.3% drop, but improving from the 7% drop in September 2018. Beverly Hills sales volume sank $150 million short of last year’s volume at this time of year, Brentwood was down $87 million, BHPO was short $55 million, Bel-Air/Holmby Hills was off $47 million, and Westwood/Century City was down only $15 million in sales volume. There were no winners so far, however, Pacific Palisades, which I also cover, was up $8 million in sales volume. Please always remember there are some large sales that skew any of these numbers and these stats are only from the multiple listings. The quarterly reports I send out reflect any private sales, but the MLS reports do not.

What does this mean? Inventory is the killer here. Make no mistake, we are down in sales units, and higher prices and interest rates can be blamed, of course, (and we will), but the reality is that the housing market is slowing down as noted by National Association of Realtors’ chief economist Lawrence Yun. As I noted in the last edition of The Schiffer Line (November 1), the housing market is cooling off, which from Yun’s perspective, this is a good thing. We need to slow down the huge pricing increases we’ve been seeing across the local market, and across the nation. As fewer buyers are entering the market today, sellers are facing resistance on higher prices. Homes are sitting longer on the market for those that are priced too high. Affordability is an issue for most regions of course, but on the Westside, we are dealing with above-average income buyers who, for the most part, push through higher mortgage rates and even pricing — low inventory is one hurdle they can’t always overcome. To a lesser degree, traditionally the market slows down as we go into the holiday season (however I can personally tell you I am busier than I have been all year).
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Median sales prices — here we go again
It begins to sound like a broken record…median sales prices are rising — again. The latest MLS report reflects a strong price surge on the Westside through the first 10 months of 2018 — with five of the six communities I am covering are up. Beverly Hills is at the top price level, with a median sales price of $6.003 million, a 5% increase over 2017, followed by Palisades at a 14% increase to $3.361 million. Brentwood was next with a 42% increase at $3.100 median sales price. Bel-Air/Holmby Hills came in at $2.685 million, a 13% increase, and Westwood/Century City had a 13% increase to $2.280 million. There are minor changes each month, but the trend lines for price increases have become the new normal. Once in a while, a community’s median sales price will dip, but comes back strong the next. Each neighborhood within each community has an abundance of variables that affect pricing. Again, the year-to-date median sales prices for your community is the best measurement for pricing trends. Please call me at 310-442-1384 if you would like more detailed information.
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Million-dollar home is no longer a rare specie

“…Who wants to be a millionaire? I do!” Marilyn Monroe would be happy to learn that there are 400,702 more homeowners whose homes are now valued at $1 million or more. Is this any surprise? Marilyn would have been very pleased, too!
The number of U.S. homes valued at $1 million or more increased by over 400,000 this year, the largest annual rise since the housing price recovery began in 2012. Slightly more than 3 million homes nationally, or 3.6% of the total, are worth at least $1 million, up from 3.1% last year and 1.5% in 2012.

Not surprisingly, many of the freshly minted million-dollar units are in California, which already boasts the most in the country. The San Jose and San Francisco metro areas have the largest shares of $1 million homes and also notched the biggest increases over the past year. Even Burbank showed up on the list at $1,01 million.

Meanwhile, 29 cities and towns joined those with a median home value of $1 million or more this year, bringing the total to 201. Nineteen municipalities joined the million-dollar club last year.

Of the roughly 15,100 larger neighborhoods around the country analyzed by Trulia, 838 have median home values of $1 million or more and about two thirds of those are in California. Nearly 30% of California’s neighborhoods have a median home price of at least $1 million, the most by far of any state. New York, Florida and Washington followed. It must the weather.
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Equity-rich properties as never before.
Note this: There are 14.5 million homes in the US are now worth more than twice the cost of their loans, according to data firm Attom Data Solutions. This is an all-time high for the U.S. An equity-rich property is defined as one where the combined estimated amount of loans secured is 50 percent or less of the property’s market worth”.More homeowners have now achieved that milestone than at any point in Attom’s dataset, which goes back to the fourth-quarter of 2013. The 14.5 million equity-rich properties represent 25.7% of all U.S. properties with a mortgage, and they mark an increase of 433,000 properties from the same time last year. According to Attom, as homeowners are staying longer in their homes, their sunk-in equity builds over time, and serves as their retirement catalyst. A predominant share of these equity-rich homes is on the West Coast and in New York — the areas with the highest number of underwater homes is in the rust belt states and Mississippi Valley.
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Some General Local West LA News
At a recent Annual Homeowners Association meeting, we got an update from the LAPD Senior Lead Officer on the status of crime on the Westside… it is up somewhat – no surprise, and the “bad guys” are getting smarter and know about our security features including Ring… but the bottom line is as always – be alert to your surroundings, and “if you see something, say something”. Lock your cars, doors, etc. I did get two other bits of info that I want to pass along. If you call 911 from your cell phone, many times that call gets routed to the Highway Patrol rather than 911… so here is the phone number for you to use to get directly to 911 – 213-928-8208. You can also use the app myla311 to report other issues to the city. There was also an update on the Purple Line coming through our neighborhoods. Construction is on target and they are working to make sure it stays as easy as possible for us to navigate while the construction is going on. There will be times when Wilshire is limited to one lane in each direction, and a possibility that at times different utilities are turned off, but we will all be advised in advance before they are turned off.
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One word of caution
In some of my recent transactions when we have been having the physical inspections, a number of items have come up that makes me want to make sure I am checking them in my house. The first one is the dreaded word “mold”. First all every home has mold, even if it is as minor as the result of the heat from the dishwasher or washer. However, many times if we have/had a leak in the house and the leak is repaired basically on the surface, the moisture from the leak grows, and then we have mold. The other items that seem to be turning up a lot is the ducting from our HVAC systems. When you have them serviced, I suggest you have the ducting checked as well, because over the years it does tend to fall apart.
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Once again, I want to wish you a Happy and Safe Thanksgiving!

 

Timely Real Estate News………………………….15 October 2018
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Managing Expectations and making some adjustments
For the last few years, it has been a sellers’ market and as such sellers have for the most part been able to get away with being somewhat aggressive with setting the prices for their homes. With the adjustment of the market and economy, it is necessary for both buyers and sellers to change their attitudes somewhat. We all, realtors, buyers, sellers need to “listen to the universe”. If we are not getting the prices on our listed properties we would like, then I suggest that those prices need to be adjusted so everyone can move on with their lives.
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Fall off to slow start — sales remain behind last year
After relatively active spring and summer quarters, compared to a year ago as we enter the final quarter of the year we find ourselves still behind in sales volume. Sales volume for the five areas I report on each month — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood — is more than 7% behind 2017 levels. Sales volume for the first three quarters was $2.670 billion vs. $2.869 billion in 2017, a 7% drop. Last October, we were 21% ahead of sales over the previous year (2016). And, of course, we know the culprits — low inventory and higher prices. Now, we are seeing a jump in mortgage rates which could have an impact on sales going forward through the end of the year. I say “could” because demand is still very high for our market, and the challenge is not necessarily always financing for our buyers: it’s lack of choice, inventory. There is another issue, it is called, managing our expectations. For a long time, the experts have been saying we are due for a correction not only in the real estate market, but in the economy in total. It appears that we are there or heading there. Recently everything has heated up so much, it honestly it has to level at some point.

In looking over the MLS stats, we are seeing sales volume declines for September in all of my areas — Beverly Hills was down $124 million in volume, BHPO was down $66 million, Bel-Air/Holmby Hills was down $62 million, Westwood/Century City was down $34 million and only Brentwood was up…. $70 million. Please remember there are still private sales that are not included in the stats that I provide in the Schiffer Line each month which would impact the overall sales volume report. Beverly Hills did have two large sales of $26.5 million and $27 million, and Brentwood had two, one for $11.3 and another for $15.45 million. Santa Monica, which is one of the communities in which I work extensively, the sales volume, was down 14% to $498 million.
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Median Sales Prices improving
This comes as no surprise as median sales prices in our market continue to rise. Westwood/Century City had the biggest jump for the year showing a 36% jump in median sale prices to $2.772 million. Bel-Air/Holmby Hills has registered a 19% increase, and Beverly Hills, already streaming upward, is up 9% in median sales price. Brentwood remains even with 2017 through nine months at $3.100 million. Only BHPO is down, minus $13% for the year.

Median sales prices for September were mixed compared to September a year ago — Beverly Hills was up 13% over 2017, BHPO was down 42% to $2.650 million, Bel-Air-Holmby Hills was up 117% to $5.282 million, Westwood/Century City was down 25% to $2.431 million, Brentwood was up 5% to $2.720 million and San Monica was down 4% at $2.728 million.

As I have pointed out regularly in The Schiffer Line, the true measurement of our monthly benchmarks is ‘year-to-date’ median sales prices as they are more representative of the composite pricing occurring in our area. And remember that median averages represent the home price in the middle — half of the homes are above the middle, and half below.
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Just, where are we? Coldwell Banker’s view
In a comprehensive review of California’s and the nation’s real estate market, Coldwell Banker released its view of what is going on across the board. In reviewing California’s situation, CB noted that after suffering the largest annual drop in GDP (since 1946), in 2007 we have made a strong recovery, with the lowest unemployment in 19 years, mortgage rates are up, unit sales are up slightly, and mid-year Southern California sales were up five months after declines.

Although the unemployment #s, less than 4%, are statistically pleasing, the reality is that for a number of reasons, millions have left the workforce since 2009, and those seeking employment have dwindled. Some of the primary contributing factors are our very large homeless rate, as well as those who simply have exhausted their unemployment benefits. As a counter point, California is looking to rebound in the coming three years as the aerospace industry and tech sectors continue to improve.
Another key point that CB made was while our median sales price in California was; $584,460, it is not quite as high as it was in 2007 ($594,530) and when you factor in inflation, we are really off 15.5% in real dollars

For the first time in three years, mid-year active listings increased, and inventory is highest in the high-end ($5 million plus) but 30% of listings have had price reductions. Single-family residences are expected to increase, but are still behind a year ago at 423,200. The median sales prices increase was up 8.2% year-to-date statewide.
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Affordability is the issue
California Association of Realtor’s Affordability Index is at 27%, meaning only that # of individuals can afford to purchase a home in the state at median price range — it was 53% in 2012, which is huge drag on all home sales, new and existing. National pending home sales are also down 1.8% in August.
With the Feds raising interest rates in September, mortgage rates are moving up again. Another Fed hike is expected before the end of the year. As a result, mortgage rates have gone over 5% and are expected to plague first-time buyers. It’s a major affordability issue facing the entire housing industry. We could possibly be looking at more interest rate hikes in 2019… But let’s have a reality check… We have been horribly spoiled with the interest rates we have had for the past few years, but in reality, even 5 or 5.5% for a 30-year fixed rate loan is still low… just not as low as it has been. In 1982 I bought my first condo to live in in Westwood (I had been buying conversions to flip prior to that), and was very happy with the 13% interest rate that I got for my loan. In 1984, we were dealing with 18 & 19 % loans… it was a nightmare. We are not even close to going anywhere near there. I am just trying to help all of us, myself included to keep everything in perspective.
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The UCLA Anderson Forecast
UCLA released its 3rd quarter Anderson Forecast late last month. According to Jerry Nichelsburg, Anderson’s senior economist, the U.S. will continue to see a strong economy reaching an increase of the growth of 3% by the end of this year, down to 2% in 2019, and 1% in 2020. However, warning signs continue to be the trade war with China, which could hurt California more critically than other states, and if Proposition 10 passes, Nichelsburg predicts housing starts will be revised lower in California.

Inflation rates are moving from 1% to 2% with oil going from $70 a barrel in 2019 to $76 a barrel in 2020. Already, as you well know, we’re seeing gasoline at $4.00+ a gallon now. That isn’t helping anyone. A primary cause of this increase is the tariffs that have been put in place.
Anderson also predicts that there will four rate hikes in both 2019 and 2020, and if China doesn’t buy any bonds, interest rates will increase further due to bond rates going higher. And all of this means that new home starts will continue to disappoint. The biggest risk Anderson sees down the road — the continued trade policy of the Administration.
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Key Stats on latest MLS report
Homes for sale are up 11.9% year over year (YOY), and in the upper end ($5 million plus) they’re up 23.6%. However, closed unit sales are down 20.9% YOY, from 6,465 to 5,113 units. And even worse, pending sales are down 41.3% YOY.

Homes are sitting on the market longer — median-priced homes are on the market 15% longer, and the average-priced home is up 5.4% days on market. The absorption rate YOY is 6.2 months, up 87% and in the upper end, absorption rate is up to 9.6 months.

On a very positive note, the CB report noted that Anderson called out that California’s employment is up 16% from the depth of the 2007-09 recession, payroll jobs are up 21%, which includes a two-day work week. One in four jobs created in California is in construction, logistics, and state employment.
So where does this leave us? We can expect to see home prices continuing upward, inventory behind previous years, and minor improvements in unit sales. But as noted above, California and the nation are facing housing challenges with rising rates, less new home construction, and affordability issues, especially with Millennials, the largest home-buying generation in the U.S.
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Earthquake early warning system…. getting close
Californians are used to being wary of the slightest tremble, and if you’ve lived here long enough to have experienced the 1971 Sylmar or 1994 Northridge earthquake, you know how a really, powerful tremble can feel — it’s nerve shattering, frightening, especially if you’re near the epicenter.
California has always been noted for its earthquakes, the most devastating one, of course, the 1906 San Francisco quake that destroyed a good portion of the city. But we have been making headway in trying to find the solution for an early-warning system that is scientifically sound and actually works.
According to a recent article in the Los Angeles Times, scientists are saying they’re getting closer to what will be the world’s most sophisticated earthquake warning system, with officials announcing they were expanding the test program in the coming months in advance of a future public rollout. Even a warning time of a few seconds can save lives, allowing utilities to turn off large high-pressure fuel lines, doctors to potentially stop surgeries, transit agencies to slow trains and schoolchildren to shelter under desks.

Earthquake warnings work on a simple principle: Seismic shaking travels at the speed of sound through rock — which is slower than the speed of today’s communications systems. Earthquake sensors that detect a big earthquake that starts at the Salton Sea and has begun to travel up the San Andreas fault can sound an alarm in Los Angeles, 150 miles away, before strong shaking arrives in the city, giving Angelenos perhaps more than a minute to prepare. It’s not here yet, but there’s a promise that we can avoid, at least, the loss of life and limb with such a system
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Bundling insurance can save but….
It’s the perfect sales pitch…by bundling your insurance policies (home, auto, life, and umbrella, etc.) with one insurance company, you can save as much as 20% to 25%. That’s the good news. Homeowners insurance typically gets the biggest discount since your home’s value is likely far greater than your car’s. Although homeowner’s insurance is always part of the ‘bundle’, insurance companies really don’t make much money on them. For example, if your home and auto insurance is bundled, you might receive discounts of 10% on your auto policy and 15% on your homeowner’s insurance. If you bundled your auto insurance with a renter’s policy instead, you might see up to a 5% discount.

The bad news is: Bundling policies encourages a “set it and forget it” mentality, but automatically renewing year after year with the same company could come at a cost. You’re less likely to check out competitors’ rates if you have to switch to two policies instead of one, especially if one is paid automatically.

Prices tend to increase at policy renewal time, and they can inch up well beyond what you would pay with another company if you don’t check rates Companies are not always equal on pricing and coverage, and my recommendation is to always review your insurance policies on an annual basis — before their year-end date, and compare. You could save a bundle by unbundling them, too. A word to the wise, just be careful to check before you automatically renew your insurance.
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What is going on with me? You might see me walking with a new companion. The weekend of the 13& 14th of October, Coldwell Banker is sponsoring a national Pet Adoption program with the philosophy of having a pet, primarily a dog or cat adds to the feeling one has of having a home, so I worked helping people adopt a new pet for themselves. I love dogs, but honestly do not have the time to really give a dog the time they need and deserve, but I might cave in if I fall in love with one of the pups the shelter we are working with are bringing to the event. Fingers crossed that I don’t weaken!

 

As for work, I am very busy with my real estate life; offers on properties, managing escrows, and selling homes. We just reduced my wonderful listing at 11736 Gwynne Lane in Bel Air Crest to $1,940,000. This represents a $50,000 adjustment in the price and is an example of listing to the universe. The house is great and has been staged. Please get in touch with me to see it.

Don’t forget to check out my app. Carole Schiffer.