Timely Real Estate News………………………15 June 2018
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Treading water…. maybe it’s the weather? 
It’s almost Summer…and with it, perhaps we will get more clarity about our real estate market, which has been treading water since the first of the year. Sales volumes are meandering around last year’s levels, and while median sales prices are bumping up (and down) in every community, we are still fighting low inventories. Open houses remain robust because demand is far exceeding supply in every community, and buyers are scrambling now to lock up financing as the Fed marches on with new rate increases (see below).
In the five communities I report on each month — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood— the total sales volume for these markets is slightly down for the year…. going from $1.516 billion in May 2017 to $1.499 billion for May 2018. That is not a big drop, for sure, but usually by this time in the Spring selling season, we are seeing more aggressive numbers, which tells me that we may well just be treading water a bit longer in 2018.
The culprit of course, is inventory. More inventory, more sales….and median prices are fluctuating as they always do. For example, Beverly Hills leads the market, of course, with a median sales price through the first five months of 2018 at $6.120 million, but just a 2% increase over 2017. Bel-Air/Holmby Hills was up 25%, going from $2.084 million to $2.670 million. And Westwood/Century City was positive at 8% up over last year, with a median sales price of $2.268 million. Beverly Hills Post office was down 10%, Brentwood was down 1%, and Marina del Rey was up 2% over 2017. Marina del Rey’s median sales price is $1.500 million through May and Marina del Rey’s total sales for the first five months of 2018 was $51 million vs. $48 million last year at this time.
There were some notable sales in May…two homes in Bel-Air/Holmby Hills were sold for $56 million and $68 million respectively, not unusual in our market. Beverly Hills, BHPO, and Brentwood all had sales of $10 million plus. I must share with you…as has been usual, not all of the high-end sales are listed with the Multiple Listing Service but are handled as private or “pocket sales”. There were 6 homes over $20 million that were not listed with the MLS last April and are not reflected in our total sales numbers. This occurs every month and is not unusual as many buyers simply want to go “off line” and not make their transactions immediately public. As I have pointed out in the past, one big risk a seller takes when marketing/selling their property in this manner, is that by not exposing their home to the open market, they may end of getting a lower price.
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May sales…. a mixed bag
May sales, compared to last year, were uneven throughout these communities. Beverly Hills median sales 
price for May was $5.625 million, down 13% from a year ago. Beverly Hills Post Office, however, was up 35%, at $4 million. Westwood/Century City was up 10% at $2.330 million for May, but Bel-Air/Holmby Hills was down 32% to $2.527 million…Brentwood was also down 12% at $3.163 million…and Marina del Rey was off 6% at $1.021 million.
You can see that for the most part, we’re treading water — not sinking, but not making much progress in one direction or another. That’s OK…because that’s the nature of our real estate market. Keep your life preserver handy.
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Fire season is here to stay…please get prepared.
According to the Los Angeles Fire Department, we are in a year-round fire season in Southern California. The lack of rainfall this year has left many areas vulnerable again…and the fire that erupted in Benedict Canyon recently is a critical reminder that you have to get your property in shape to protect your home and possessions….and keep it that way…12 months a year. It’s non-stop for homeowner protection.
The “villain” in this fire, which covered 35 + acres, was a “Weed Wacker” that ignited the blaze, which quickly ran up the hillside, threatening nearby homes and neighborhoods. Los Angeles fire officials urge us to use licensed contractors who follow safety rules – such as avoiding metal blades and carrying fire extinguishers. The irony of this is that the “Weed Wacker” was being used to clear brush
The LAFD’s quick action prevented a major fire running up the Canyon, and it serves all of us as an urgent reminder to keep our property clear of clutter, unnecessary brush, and making sure you have your home and yourself properly prepared — inside and out. Please see the LAFD web site for more information on this critical issue: https://www.lafd.org/fire-prevention/brush
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Taking it a step further
I recently received a vehicle disaster supply kit for any kind of emergency. I thought I would share some of 
the key items with you: First aid kit, Clothing – blanket(s), jacket, comfortable walking shoes, gloves & extra socks, Tools – batteries, flashlight(s) radio, tarp, Specialty Items – whistle, insurance papers, important phone numbers, CASH, Food – canned food &juice with an opener, plastic utensils and cups. For a complete list and more information, please go to
http//www.fema.gov/areyouready/assemble_disaster_supplies_kit.shtm.
Not sure about you. But I think we all will need to have SUV’s for all of this plus the everyday things we keep in our cars!
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Federal Reserve kicks it up a notch…. more rate hikes coming
As expected, the Federal Reserve raised its benchmark short-term interest rate but it also upgraded its forecast from a total of three hikes this year to four amid an improving economy, falling unemployment rates and slightly stronger inflation. The move is expected to cascade through the economy, in particular nudging up rates for variable-rate consumer loans such as credit cards and adjustable-rate mortgages.
This has been anticipated since their last meeting. It’s also likely to push up bank savings rates for Americans, who are finally realizing higher returns on CDs, bonds and other fixed-income assets after years of meager yields. As noted in the Fed’s monthly statement, the main takeaway is that the economy is doing very well, and “most people who are looking for a job, can find one,” according to Fed Chairman Jerome Powell.
The Central Bank lifted its federal fund rate — which is what banks charge each other for overnight loans — by a quarter % point to a range of 1.75% to 2%. That’s within shouting distance of its longer-run forecast of 2.9%. It’s the second rate hike this year and the seventh since the Fed began bumping up rates amid an improving economy in late 2015.
For the years after the Great Recession of 2007-09, the Fed kept its key rate near zero to stimulate sluggish growth.
In perhaps a telling sign, the Fed removed its previous assertion that its key rate “is likely to remain, for some time, below levels that are expected to prevail in the longer run.” That suggests the Fed could push up rates more rapidly. Powell, however, said it simply means rates are getting closer to normal levels.
In talking with my mortgage lender contact, this may have some dampening effect on loans, but with the economy booming as it is now, and with the stock market more up than down, higher-income buyers are not going to be hampered by modest loan increases. Affordability for first-time buyers will be impacted more, as there is just a very limited inventory of houses (including condos) available to this market.
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Will California split into three states?
This is your chance to “leave” California as you know it. Placed on the November ballot is another proposal to split California into ‘like-minded areas that would become official if voters approve and the State Legislature (both houses) approve it, essentially putting them out of a job. Then Congress has to approve it as well. Let’s forget the sure-to-come lawsuits that will spring forth if it somehow passes.
According to the Los Angeles Times, “California’s 168-year run as a single entity, hugging the continent’s edge for hundreds of miles and sprawling east across mountains and desert, could come to an end next year — as a controversial plan to split the Golden State into three new jurisdictions qualified Tuesday for the Nov. 6 ballot.”
It’s been tried before…. but if a majority of voters agree, a long and contentious process would begin for three separate states to take the place of California, with one primarily centered around Los Angeles and the other two divvying up the counties to the north and south. Completion of the radical plan — far from certain, given its many hurdles at judicial, state and federal levels — would make history.
If this happens, it would be the first division of an existing U.S. state since the creation of West Virginia in 1863.
One of the many issues facing such an event would be whether this could be legal via a ballot initiative, contrary to California’s state constitution. In the already ‘war of words’ engendered by this ballot initiative,
the debate rages around the legality of the whole initiative process, and there is no assurance of the outcome with respect to who would end up in power in each of the newly created states. Critics cite the aversion of seated politicians risking their place in the state legislature or Congress to approve their job elimination under such a plan.
It will be fascinating to see this going on over the next five months…Did you see the movie…” La La Land”? Only in California.
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$1.5 trillion student loan debts aren’t going away easily
Yes, “trillion”! Student loan debt is now the second highest consumer debt category – behind only mortgage debt – and higher than both credit cards and auto loans. And it’s not going away easily.
According to a national report from “Make Lemonade”, there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt in the U.S. alone. The average student in the Class of 2016 has $37,172 in student loan debt. This is crimping mostly the lifestyle and home-purchasing desires of millennials, the largest single home-buying group in the U.S. today.
The latest student loan debt statistics for 2018 show how serious the student loan debt crisis has become – for borrowers across all demographics and age groups. This is one of the main reasons that millennials are moving back home with their parents — nearly 34% of this generation are living at home, trying to save money and eliminate their student loan debts.
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Do home prices influence birth rates? You bet they do!
Economists don’t miss a trick when it comes to figuring out future home-buying trends. Inventory, lack of supply and demand, price growth, foreclosure rates, mortgage rates — these all play a role in their ability to determine the future of the housing market.According to a recent national analysis, birth rates among 25- to
29-year-old women decreased in counties with the fastest home-price appreciation. On average, a 10 %-point rise in home values correlates with a 1.5 %-point drop in birth rates.
The trend is most noticeable in Los Angeles County where home values increased 31% from 2010 to 2016. During the same time period, birth rates fell 17%. That means there were 2,588 fewer babies than would otherwise be expected, noted the report.
Young couples said financial stability, or the lack of it, is an important factor in their decision to have children. But true financial stability may be out of reach for most as home prices continue to rise, the report said.
At the end of the day, millennials in particular are much more cautious about making a move to purchase their ‘dream home’, with a third staying home with parents until they can afford the move. That includes, obviously, the decision to start a family when living with mom and dad.
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My Real Estate Perspective
The inventory woes definitely impact my business. I have about 10- 15 buyers, some with more specific needs or requirements than others, and it is very difficult to find available properties for them to purchase (both listed and privately available). I have written to a number of you asking if you are considering selling your properties, with a very low response. Once again, if you are at all considering selling your property, please let me know as it might work for one of my clients.
In the meantime, please do not forget my lovely listing a 12547 Promontory in Mountaingate. We recently reduced it by $90,000 to $2,450,000 and currently are working with one or two buyers who are interested in it. In addition to showing it by appointment, I am there on Sunday, so please stop by and say “hello”.
I also just listed a wonderful home in the hills of Tarzana, 4311 Coquette Place, located on a cul-de-sac, this single story 6/6.5 home is being offered at $1,825,000. You can preview of them on my web site www.CaroleSchiffer.com.
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Total existing-home sales. which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 2.5% to a seasonally adjusted annual rate of 5.46 million in April from 5.60 million in March. With last month’s decline, sales are now 1.4% below a year ago and have fallen year-over-year for two straight months.
Of the 21 closed sales of $20 million-plus, buyers were mostly American (76%) — 16 Americans, 1 from Monaco, 1 from Mexico, 1 Japanese, 1 English and 1 from Canada. There were five sales in Malibu, four in Beverly hills, three in Bel-Air, two each in Sunset Strip in Beverly Hills Post Office, Holmby Hills and Pacific Palisades, and one in Brentwood. Again, it is worthy to note that six of the 21 sales over $20 million were not listed in the MLS which primarily affects sales volume.
warm climate, clean air, and the architecture of Spain, this includes iron balconies, terra cotta roofs, courtyards and fountains, and ornate details evoke the magic of Spain brought here centuries ago. Especially in our beautiful Westside, the Mediterranean home remains a part of our fabled past. Sometimes referred to as Spanish Modern, Mediterranean houses are mostly concentrated in warmer climates like California or Florida. If one were standing in the middle of Spain today, you could be looking at landscape similar to that found in Southern California. During my first trip to Spain, I had to remember that what we have here is not found in mostparts of the country as people were amazed by the sight of palm trees, bougainvillea, etc.
floorplans, stucco exteriors, ornamental details, arches, higher, vaulted ceilings, and courtyard entryways. You’ll find throughout the Westside entire neighborhoods and developments devoted to Mediterranean-style homes. It has been a very popular style, and some home builders try to preserve authentic treatments such as cemented tile roofs, carved beams and ornate window treatments.
big long-term commitment” to raising a family, says Karen Guzzo, a sociologist at Bowling Green State University. “They have these standards: ‘I want to live in a good neighborhood. I want to have a house. I want to be able to have good child care and take time off from working.’”
only manage less than 100,000. Why is that? What happens to these 86,000?
Residents in many cities, including Los Angeles, seem to be of two minds about whether they are in favor of the new wheeled sensations. If there’s any consensus, it’s that the scooters are a mixed blessing — and a fun idea that could help sell an area to buyers, especially Millennials.
It’s call the “Silver Tsunami” — an apt name for a good idea. Millions of Baby Boomers — those men and women born between 1946 and 1964 — could seek to downsize end masse in the coming years as they approach their 60s and 70s, prompting a rush to build smaller and more affordable homes, according to Josh Lehner, a senior economist and author of a new report recently released.“Turning to the data shows that it kinda, sorta does happen on a small scale,” writes Lehner, referring to families who downsize in their golden years, a phenomenon that has largely been accepted as conventional wisdom despite little rigorous investigation. Another thing I have seen for a number of years is the desire to live in a single-story home. Since we have a shortage of land in Los Angeles proper, and not an enormous number of single story homes, we are seeing an increase for the desire for condos or more “senior housing” facilities.
driving range or green itself, please have them contact me regarding my lovely home at 12547 Promontory, which is priced at $2,450,000. It is 5 bedrooms/ 4.5 baths. I am open on Sunday from 2 – 5. Coming up in the next few weeks, I have a 3-bedroom, 2.5 bath home in Bel Air Crest which will be priced at $8,950. For someone looking to live in the lovely hills in Tarzana, I have lovely 5 bedroom, 5 ½ home with pool, that has been remodeled priced at $1,825,000. I am looking for a home for these clients in either Bel Air Park or Bel Air Sky Crest so if you know of someone who is interested in selling in either of these communities or perhaps it is you, please let me know.
On a personal front, as you may remember we celebrated my lovely Mom’s 96th birthday last month with fun celebrations for a busy weekend. The party included a BBQ at my home with entertainment from a Mariachi band that was hired by my Mom’s companion. I am still waiting for the photos and will share with you when I get them, but I can tell you all loved it and cried we were so happy, particularly when Mom got up from her chair and started to dance to the music! It was amazing to see and be a part of. Thank you all for your celebratory wishes.
five cities I report on didn’t move the needle. For the cities of Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, and Brentwood, sales volume through the first four months of 2018 were statistically even…$1.092 billion through April 2018 vs. $1.093 billion through April 2017. For Santa Monica, one of my key communities also, was down 34% in sales volume to $156 million.
this time. Bel-Air/Holmby Hills was up 44% to $2.775 million over 2017, and Westwood/Century City was up 8% to$2.285 million. Beverly Hills Post Office was down 15% at $2.391 million, and Brentwood was down 16% $2.995 million. Santa Monica’s median sales prices were up 34% to $3.085 million.
months of any year reflect both economic transitions and market conditions. We have seen the market According to Market Watch, Fed notes indicate there could be two more rate increases this year, and the low unemployment rate of 3.9% doesn’t appear to be stoking inflation worries, even if it overshoots its 2% goal. One also needs to be very careful in just looking at the low unemployment numbers. There are a lot of people out there whose benefits have run out as well as some people who are not even trying to find work. These need to be factored into the low unemployment numbers. The good news out of the Fed is that wages are expected to grow, even though we haven’t seen much wage growth since January.
2018 when compared to April 2017. Beverly Hills was down 34% in MSP, Beverly Hills Post Office was down 60% compared to April 2017, Westwood/Century City was down 20%, and Brentwood was also down 25%. Only Bel-Air/Holmby Hills was us an impressive 111% when comparing April 2018 to April 2017. Santa Monica’s median sales price for April was 69% higher than last year at this time.
expensive market, California has become the first state in the nation to mandate solar panels for all newly constructed homes. In a unanimous 5-0 vote last week, the California Energy Commission approved the policy. Experts ae saying the inclusion of these solar panels could cause an increase of $10,000 to construction costs for a single-family home. On the flip side, the commission says, the panels could yield much more in energy savings. For residential homeowners, based on a 30-year mortgage, the Energy Commission estimates that the standards will add about $40 to an average monthly payment, but save consumers $80 on monthly heating, cooling, and lighting bills.
Even so, what this has brought to our state — according to the Center for Continuing Study of the California Economy, is that “we welcome immigrants and diversity, while reducing greenhouse emissions. And in spite of the roadblocks government puts in the path of developers, California is an “attractive state for talent, innovation, and entrepreneurship.” Somehow, you just don’t feel it when stuck on the 405.
food, making lists, calendar reminders…. voice-controlled lighting and increased safety through connectivity apps.
32% in 2013, according to the National Association of Realtors (NAR).
has gone up by more than 60% in just 10 years.
We have reduced my lovely listing at 12547 Promontory in Mountaingate by $90,000 to $2,450,000…and are having a great deal of activity and hope to have it in escrow very soon. My clients are ready to move to their new home. Right after the first of the month, I will be bringing out a great, single story home in the hills in Tarzana. It is 5 bedrooms, good sized yard, and a real swimmers pool. The price will be $1,825,000 and I am in the process of looking for a new home for them. There are also some leases in Bel Air Crest coming up soon.
May Day is a public holiday usually celebrated on May 1! It is an ancient northern hemisphere Spring festival and a traditional spring holiday in many cultures. Dances, singing, and cake are usually part of the festivities. In the late 19th century, May Day was chosen as the date for International Workers’ Day by the Socialists and Communists of the Second International to commemorate the Haymarket Affair in Chicago.
The rapidly rising home price situation combined with the continued lack of available housing is causing alarm at the National Association of Realtors. NAR’s chief economist, Lawrence Yun stated, “There is no let-up to rising home prices. The Case-Shiller Index and National
According to 
In sum, house hunting has become a highly skilled art of finance, research, and plain old detective work. Many homes today are not listed on the MLS, which means there are many private sales, especially on the Westside’s high-end market. I utilize a broad peer network of agents with whom I have worked with for many years — we help each other find buyers before their clients’ homes come on the market. It works! However, there are pros & cons to buying & selling “pocket listings”. Sellers like it because they don’t have to deal with the buyers coming through their house, open house, etc., but there is also the need to know that by not putting their home on the open market, there is a possibility that they may not always get the optimum price, and buyers like it because they can avoid the multiple offer situation that we all know about. 
For many, there is a “will” but no “way”. Housing affordability is taking on crisis proportions throughout much of the U.S. and on a national level affordability is down from a year ago. Based on their income, fewer households can afford the active inventory of homes currently for sale on the market That is according to joint research from the National Association of Realtors and 
It’s not all bad news for buyers. There has been an uptick in the number of homes on the market. As of the end of March, adjusted, existing home sales rose for both month to month and year to year. Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 423,990 units in March, according to information collected by California Association of Realtors from more than 90 local 
March’s sales figures were up 0.3% from the 422,910 level in February and up 1.6% compared with home sales in March 2017 of a revised 417,380. The year-to-year increase was slightly stronger than the six-month average sales growth of -0.1% recorded between September 2017 to February 2018. The big sales winner was the San Francisco Bay Area with six of the top nine counties in the State showing increases in unit sales. Los Angeles lagged behind, including the more affordable Riverside and San Bernardino counties. 
But now, demographic, political and meteorological changes are calling the future of the single-family house into question. Its critics say that the house is too sprawling in a time of climate change, too expensive in a time of economic inequality and just too boring for many city-dwelling Millennials; that more of us should live closer together, in neighborhoods near mass transit, with less need to drive and more chance to interact. 
Right in our own neighborhoods, we’re seeing opposition to increased density of housing near our Metro rail system, and Millennials, in particular, are opting to stay in urban areas where they can walk or ride a bike to work and enjoy the spoils of a cosmopolitan environment. And this translates to multiple housing complexes — apartments and condos, not single-family dwellings. Land is too expensive. The other day I was with one of my associates at a listing she is getting in the hills in Malibu. The house is beautiful, and the setting fabulous, very private with views from the Palos Verdes Peninsula to Point Dume… but it is very remote, with long winding roads with no street lights, etc. I honestly could not see myself living there, but I know it will appeal to a great deal of people wanting to be close to “town”, yet “getting away from it all”.
Buyers of the $20 million-plus homes were 12 Americans, 1 Canadian, 1 Japanese, and one from Monaco. These sales were in Beverly Hills, Malibu, Sunset Strip, Bel-Air, Holmby Hills, Beverly Hills Post Office, Brentwood, and Pacific Palisades. Interestingly, 15 of the sales of $20 million-plus homes sold were not listed in the MLS. 
Increase in holding period for carried interests
I have a great home in Mountaingate that is available for sale. With a view of the driving range, golf course and hills, it has 5 bedrooms, 4.5 baths, family room and library/study. Wonderful flow for entertaining, big yard with room for a pool, and all behind the security gate. Priced at $2,540,000. I also have a lease in Bel Air Crest that will be available in mid June. We are asking $8900 for this lovely 3 bedroom, 2.5 bath home that has been updated and remodeled from the inside out. We are showing it now, but have to wait for the owners children to finish their current school terms. With all of the talk about multiple offers, believe it or not we had multiple offers on my lease listing in Bel Air! I look forward to hearing from you as to 
Felix Cinco de Mayo…. I hope you have/had a happy Cinco del Mayo and enjoyed a Margarita or two. It is a fun time to kick off Spring.
Sunday the 13th of May brings us Mother Day. A wonderful day to celebrate all of the Mother’s. I’m looking forward to spending the day with my Mom who will be turning 96 on the 23rd of the month. Enjoy!!!!
Unplug appliances – Everyday appliances such as televisions, phone chargers, desk top computers, etc., continue to draw power and use up energy – even when they’re turned off. Make sure to unplug those items when they are not in use.
That’s good news. Rising home prices were not the only reason for the increase in total sales. There was a 6.8% increase in the number of single-family homes sold — from 172 homes this year vs. 161 homes in 2017. Inventory is plaguing real estate markets everywhere in the country, so even a minor increase is welcomed news. We are seeing strong open house attendance and if a property is properly priced, multiple offers is the rule. But we are still finding some houses sitting in a seller’s market because some homeowners have exaggerated opinions of their home values, which causes them to miss qualified buyers who are genuinely interested in purchasing the homes (the past few weeks I have been involved in multiple offers for both buyers/sellers & lessors!). However, we are still finding some houses sitting in a seller’s market because some homeowners have exaggerated opinions of their home values, which causes them to miss qualified buyers who are very knowledgeable and genuinely interested in purchasing the homes.
Median sales prices were up in three of the five communities I report on — Beverly Hills was up 17% through the first three months of 2018 at $6.948 million…Bel-Air/Holmby Hills was up 18% at $2.550 million MSP….and Westwood/Century City was up 16% at $2.303 million. Two other markets were down — Beverly Hills Post Office was down 10% to $2.376 million…and Brentwood was down 15% to $3.205 million through the first three months. Malibu’s median sales price was down 9% to $2.437 million.
So, what is the market telling us? Through three months of 2018, we’re seeing a strong return of sales volume which is caused by both higher prices and a very modest increase in inventory. We’re seeing also that the average Sales Price to Original Listing Price — always a good gauge on the critical price factor — was down to 88% for March, one of the lowest levels in recent months. This means that homes priced higher than the market will sustain are sitting longer and sellers are having to reduce their prices to move their homes. 
In a national survey of 2,000 adults, the Bank of America discovered that millennials are “itching” to purchase a home…they see photos of homes on social media that their friends bought, and they’re thinking…” What about me”? The FOMO factor is driving many to develop a pathway to a home purchase, and the exposure to their friends who have made that leap is pushing them closer to buying a home of their own.
All signs point to the Federal Reserve leaning toward a slightly faster pace of raising rates with the growth outlook positive and confidence in hitting their inflation target strengthened according to the Fed’s March minutes released this week. Even with the weak jobs report for March — 103,000 added for the month – the Fed is confident that the economy is strong and raised the GDP projection growth at 2.7% vs. a previous 2.5% 
The amount of equity in today’s homeowners are able to tap is at the highest level on record…more than 10% than at the pre-recession peak in 2005. Homeowners are tapping into this equity to invest in income properties and taking advantage of bulging equities in their home. 
Would you believe multiple offers for leases? I have a lovely lease on Thurston in Bel Air, and in the last week, we have received multiple offers and are in the process of 
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