Timely Real Estate News………………………..1 June 2016
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Confusion reigns in housing market…no surprise
Conflicting news about homes sales falling and rising pending home sales demonstrate the confusion reigning within the housing industry. In housing news, April housing starts jumped 6.6 percent from March, above expectations. However, year-over-year housing starts were down 1.7 percent from April 2015. Last month, I reported that CoreLogic, a respected real estate data tracking firm, stated that home sales fell for April in Southern California, but prices rose. No surprise there. And not surprising for this time of year, building permits, always a sign for future construction, increased 3.6 percent, not what was expected, but it still rose to an annual rate of 1.11 million.

According to the California Association of Realtors last week, statewide pending home sales rose in April on an annual basis and had one of the strongest monthly increases this year in the state on an annual average that hasn’t been seen since 2012. Nationally, the National Association of Realtors reported that pending homes sales in the US rose to its highest level since 2006. “Perhaps a trend is emerging in that we are going to soon see a solid increase in homes sold,” Carole Schiffer stated.

Federal Reserve watchers, however, believe the economy is still a question- – for example, manufacturing is still muddling along. This is according to key regional manufacturing reports out of Philadelphia and New York, which were worse than expected. A stronger dollar has been blamed for the manufacturing slump, but the problems may be a bit deeper than just currency. With a marginal increase in the Consumer Price Index, inflation isn’t a factor…yet, but there are worries that inflation could creep into the mainstream and the Fed will respond with rate hikes in their June 14-15 meetings. Of course, mortgage bonds are intimately connected to Fed rates, and any raise in rates could portend some volatility in the market.

“In these times, there is always some confusion when comparing our Regional or State sales results to a national market,” Carole Schiffer stated, “but we have always maintained that what happens in the Westside Los Angeles area remains somewhat detached from national trends. The fact that sales are down and prices are up here,” she stated, “is really a factor of not enough homes and choices on the market. We’re already seeing signs that inventory is slowing increasing.”

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“Mom…would you mind if I stayed with you a bit longer?”
Stop me if you have heard that one. According to an analysis of census data by Pew Research, Millennials are either not moving or coming back home to roost and for the first time on record, are living with parents which has become the most common arrangement for people ages 18-34.

Nearly one-third of millennials live with their parents, slightly more than the proportion who live with a spouse or partner. It’s the first time that living at home has outpaced living with a spouse for this age group since such record-keeping began in 1880. The remaining young adults are living alone, with other relatives, in college dorms, as roommates or under other circumstances.

Amplified by the economic upheavals of the Great Recession, the sharp shift reflects a long-running decline in marriage, a trend that has been particularly evident among Americans who lack a college degree.

The pattern may be a contributing factor to the sluggish growth of the U.S. economy, which depends heavily on consumer spending. With more young people living with their parents rather than on their own, fewer people need to buy appliances, furniture or cable subscriptions. The recovery from the 2008-09 recession has also been hobbled by historically low levels of home construction and home ownership.

“When you think about it,” Carole Schiffer said, “it can be nice to still have your old room and not have a mortgage or rent payment to make each month.” This factor is certainly affecting the housing market as millennials are the most prolific market segment in home sales.

One mystery that has confounded analysts since housing began to recover in 2012 is why there aren’t more homes for sale. The lack of available houses has driven up prices and made it less affordable for many would-be purchasers to buy homes. Another mystery is that when the economy started to improve, economists predicted millennials would move out and buy a home….that didn’t happen. In speaking with my niece (26) and nephew (24) this past weekend, both of whom do not live at home, most of their friends do still live at home. My nephew Connor who is currently living in Montreal while he finishes college, is very clear in that since he has lived on his own for the last four years, he clearly has no intention should be return home to Vancouver rather than staying in Montreal! Morgan who lives in Vancouver with her boyfriend has lived outside of her parents’ house for three years.

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Housing is never far away from politics….
With fast-rising home prices a ‘fact of life’ in California, combined with a lack of housing to meet even minimal demand levels, the high cost of housing has emerged as a growing political issue in Sacramento. Critics have cited the high housing costs are a reason for moving operations outside the state. The owner of Jamba Juice, for example, announced last month it would move its corporate headquarters from Emeryville in the Bay Area to outside Dallas, in part because of Texas’ “attractive cost of living.”

Academics and economists have blamed an underproduction of housing in the state, relative to population growth, as a major culprit in widening the gap between California home prices and the rest of the nation. For example, home prices in coastal California are more than three times more expensive than the rest of the country, compared with only about 50% more pricey in the 1970s, according to a report last year from the state’s independent Legislative Analyst’s Office.

In a bid to ease the state’s housing crunch, Governor Jerry Brown proposed to streamline the permitting process for developers who include below-market units in their projects. Though fewer Californians were willing to commit to a home purchase in April, steady job growth and historically low mortgage rates mean there is still enough demand to send values higher.

The median price rose in all six counties tracked by CoreLogic: Los Angeles, Orange, Riverside, San Bernardino, Ventura and San Diego. In L.A. County, it climbed 7.3% from a year earlier to $520,000, while in Orange County it jumped 7.5% to $645,000.

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Credit scores can range all over the map….                                                                    So you think your …..Wait a minute. If you dig deeper, you’ll probably discoveryou have more than one FICO score — they are not “absolute” according to experts. Based on their programming, some FICO scores used by lenders will vary. Like most computer users, the most up-to-date version of a credit score reporting system may not be used by one vendor, but used by others. One will generate a different outcome than the competitor’s.

Who’s right? You generally can’t predict which scores a lender will use. Not only are there different name brands, but FICO offers versions customized for certain types of lending. The scores typically used by credit card issuers are different from the ones used by auto lenders, for example. These industry-specific FICO scores are on a 250-to-900 scale, rather than the 300-to-850 scale used by other FICO scores.

Mortgage lenders, in particular, use relatively old versions of FICO. That’s because the agencies that buy most home loans — Fannie Mae and Freddie Mac — haven’t updated their requirements so that lenders can use newer versions. Some credit card companies offer their customers free FICO scores, typically from one bureau.

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Home ownership…how does $1 million sound?
You don’t have to be a millionaire to live in a million-dollar home. Home buyers are finding out that homes now valued at $1 million or more have grown by double digits in some neighborhoods. “And on the Westside,” Carole Schiffer stated, “we’ve surpassed that threshold already in most neighborhoods.”

It’s called the “Million Dollar Creep”, a trend that is taking place in pockets of growing affluence all over the United States, and especially in California. Homes in such places at Atwater, Eagle Rock, and near the Coliseum are seeing these $1 million break-throughs happening in neighborhood after neighborhood.

For example, of the 100 largest metropolitan areas in the U.S., home prices in the extended commuting range of Silicon Valley, buoyed by lofty tech industry salaries, have inflated the most. San Francisco, San Jose and Oakland, respectively, had the largest increases by percentage of $1 million-and-up homes. In San Francisco, where the number of seven-figure homes was already the highest in the country at 20 percent in 2012, the number today is a staggering 57 percent.

“Homes that were selling in the mid-$600,000s two years ago near Silicon Beach, are now pushing $1 million or more,” according Carole. “Lack of inventory, of course, has a lot to do with this, and clients are scrambling 24/7 to search for neighborhoods they can afford. It’s not getting any easier.”

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What a surprise she had! We scheduled the arrivals of my family from Canada over three days, so that every time Mom turned around, someone else was showing up. It was great fun, and a lot of happy tears were shed. I had a great time visiting with the kids who I had not seen since Christmas. They are totally grown up and are not kids anymore.

We have just reduced the price of my lovely listing at 2120 Dean Circle in Mountaingate by $100,000! The new price is $2,450,000. Please give me a call to see it, you won’t be sorry.

As a reminder I am here to celebrate all of your real estate needs.

Just a reminder we are having a special day at the Brentwood California Pizza Kitchen. (See link)  Any food eaten in the store, ordered on line or take out will effect a 20% donation through the Coldwell Banker Community Foundation to the Children’s Hospital of Los Angeles. Just bring in the flyer and yourself.

I would like to Subscribe to the SchifferLine

Timely Real Estate News…………………………………..15 May 2016

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Existing US home sales predicted best since 2006….but not by much
Even though supply constraints and home price growth are outpacing wages the National Association of Realtors (NAR) is predicting existing-home sales are still on track to come in at their highest pace since 2006. Lawrence Yun, chief economist for the NAR, monthly existing-home sales were uneven in the first quarter but still came in at a seasonally adjusted annual rate slightly higher (5.29 million) than last year’s overall annual pace (5.26 million). Demand has mostly remained strong – especially in the top job-producing metro areas – and is being upheld by mortgage rates near three-year lows and the 14 million jobs gained since 2010.

While the increase is slight over last year, “…the housing market continues to expand at a moderate pace in spite of the fact that home prices are rising too fast in some areas because of insufficient supply fueled by the grossly inadequate number of new single-family homes being constructed,” said Yun. “The good news is that pending sales in recent months have remained stable and should support a modest gain in home sales heading into the summer.”

In Los Angeles, “….we see these national real estate stories from authoritative sources, such as the NAR, and we have to temper these statistics with — what is happening here, especially on the Westside. As you will see in this issue of the SchifferLine, sales volume is down by 11% for the communities I report on,” Carole Schiffer said. “Median sales prices are also down in four of these areas as well. Because of the lack of affordable housing, one of the many factors we need to be aware of is that with the increase in sales prices, however slight they may be, we are locking out many first-time buyers, some of whom are part of the Millennial generation. When you combine that with their student and government loan burden, the challenge cannot be easily overcome, even though we have some of the best mortgage rates in recent times.”

Yun forecasts existing sales to finish 2016 at a pace of around 5.40 million – the best year since 2006 (6.48 million). After accelerating to 6.8 percent in 2015, the national median existing-home price is forecast slightly moderate gains to between 4 and 5 percent this year. And on the topic of first-time buyers, Yun stated that their ongoing absence is the missing link to a full housing recovery; this is, amazingly, during a time when conditions should be ripe for a larger share of them buying homes.

Yun pointed out that today’s prospective homebuyers are the luckiest in a generation because of low mortgage rates but are the ‘unluckiest’, too for the roadblocks — such as student loans, high home prices, and lack of choices — hampering their ability to buy a home.

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June gloom comes early….sales volume off, listings down, too
The ‘marine layer’ comes in at night and leaves mid-day this time of year, but June gloom for the real estate industry arrived a bit early and thus far is not leaving so quickly. According to Beth Styne, Vice President, Chief Operating Officer, Coldwell Banker Residential Brokerage for the Greater Los Angeles Company, real estate sales in California are down 7%, closed escrows are down 9.5%, homes in escrow are even worse — down 28%. But the average sales price is up 4.3%, and the absorption rate is +21%. California continues to follow national trends in all areas.

In Los Angeles, Beth reported that listings are down 9%, closed escrows are down 6.5%, and homes in escrow are way behind, down 34%. And what’s bothersome to sellers, average sales prices are down 7.9%. So what does this all mean?

More specifically, in the communities I report on, overall sales volume reached $855 million for the first four months of 2016, off by 11% from the $962 million reached in 2015. Yes, there were significant large sales last year that skew the sales volume (think $73 million Bel Air sale in 2015), but Beverly Hills was down $40 million through the first four months, Bel-Air was down $150 million in sales volume compared to last year, but sales volumes were slightly up in Beverly Hills Post Office, Brentwood and Westwood/Century City (mind you there were three large sales in Brentwood in April – $9,775,000, $12,000,000 and $19.715.787) that will once again skew the numbers.

Another one of my areas of focus is Pacific Palisades, and sales volume was down 23% from last year to $236 million, from $309 million thru April 2016. “So, what we’re seeing is that traditional large-volume sales from Beverly Hills and Bel-Air  just aren’t happening like it did in 2015…but that’s OK…these figures tend to run in cycles as we have noticed over the years,” Carole Schiffer said. “What is interesting is the total number of homes sold this year in these communities was 237 homes compared to 227 homes in 2015. So we sold more homes so far this year, but the average sale price was lower.”

Median sales prices in Beverly Hills were down 19% to $4.250 million…but Beverly Hills Post Office was up 29% to $2.525 million. Median sales prices were down in the other areas —Bel-Air down 17%, Westwood/Century City down 2%,Brentwood down 18%, and Pacific Palisades was off 4%.

When you compare median sales prices for April 2016 to April 2015, Beverly Hills is down 51%, BHPO is up 10%, Bel-Air is down only1%, Westwood/Century City is up 4%, Brentwood is down 26%, and Pacific Palisades is down 7%.

“What we are witnessing is basically a normal market: If a home is properly priced, it sells quickly. If it isn’t, it sits on the market. We have lots of buyers out there,” Carole stated, “and they are sophisticated and demanding. Inventory is actually increasing in our market, so that’s good news`”. As some of you may remember, I am also a mentor to the new licensee’s in my office, and of the 10 of them, three of them are moving through our training program quickly and in one case has completed two sales in about two months.. “It is very exciting to me to see these beautiful flowers blossoming so quickly”.

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Are we really “unaffordable”? No simple answer – Depends on how you look at it!
One cannot compare Malibu to say, Boyle Heights — the asking price for the home is Malibu is $1,118 per square foot, vs. $269 per square foot in Boyle Heights. If it were that simple, buyers would opt for communities that they could afford, but even within predictable communities where the “average” may well be within the range of a first-time buyer, however on closer inspection, the price differential can — and is often — deceiving.

Homebuyers are combing the hills, valleys and neighborhoods of what might appear to be “un-discovered, untouched” areas that have recently been in the spotlight — such as Venice, Culver City, Palms and Mar Vista. But those areas are no longer undiscovered or untouched, particularly with the growth of Silicon Beach. Lower prices can be found in Mount Washington (as low as $155 per square foot), El Sereno ($163), East Los Angeles ($173) and Hollywood ($186) that are all less expensive than the lowest priced property in Boyle Heights ($188). Recently one of my mentees wrote an offer for her clients in the Atwater Village area. The house was listed at $650.00, which generated 38 offers, and sold for a whopping $825,000 with no appraisal contingency! This is what I have been referring to with first time buyers being priced out of the market.In the particular case, the top price these buyers could pay was $725,000 and that is what they wrote their offer at, but obviously were “blown out of the water”. Also now the barre will be raised for similar homes in the area at $825,000.

My advice is to keep an open mind on looking at “opportunities” in a variety of neighborhoods. “There can be ‘jewels’ among areas that might at first seem out of reach…the trick is to persevere and yes, work with an experienced real estate agent who can help you discover these nuggets.”

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How can we get to “affordable” from “unaffordable”? CAR has an answer
That’s the question on many people’s minds — what can we do to get first-time buyers into a home? In a recent report on the ’state of affordability’, saving up to buy a home in Los Angeles or San Francisco is increasingly challenging. First-time homebuyers, if they continue to save at the same pace, will have to wait 20 years to buy a home in Los Angeles and nearly 28 years in San Francisco. “That can be quite daunting!

The California Association of Realtors (CAR) is aiming to ensure that owning a home is not a pipe dream. In a two-year study, CAR formed an Affordable Workforce Housing Task Force to provide California residents with the appropriate tools to find and finance affordable housing. The task force also examined the state’s current policies to make changes that could positively impact the housing market.

What they did was work with the California Assembly to provide $1.3 billion for affordable housing programs, including rental housing, farmworker housing, shelter programs and seismic retrofits. The largest pool of money — $500 million — is proposed to fund rental housing for lower income working families or those making 60 percent or less of the area median income. Another $300 million in tax credits would help to fund private developers to create more than 3,000 homes. Construction, rehabilitation and acquisition of 5,700 multifamily rental homes is expected to cover $200 million in funds. Also included is $400 million to go toward homeownership and rental housing opportunities for individuals who need down payment assistance, homeownership assistance and rental housing. Its ambitious program, and much needed in California.

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So, what’s hot….here are the hottest-selling neighborhoods in Q1
Let’s face it, some areas are hotter than others. And there are surprises to many who follow this stuff. For example, all four communities in Westside-South this year, which includes Culver City, Inglewood, Ladera Heights and Park Hills Heights, saw an increase in average sold price for both condos and single-family homes. Days on market fell for the most part as well.

The one exception was Ladera Heights, which saw a 73% increase in days on market. However, this community saw a massive jump of 85% in the number of sales.

If you think that building a $2.2 billion stadium in your city is going to help real estate values, well, you’re right. Home prices are going up, inventory is steady, but days on market saw a drop of 54% on condo sales. Average sold price was up 22 percent. The Rams score again.

In Eagle Rock, home sales in the first quarter increased 48% and prices increased 14%. In Hawthorne, home sales rose 38% and prices for single-family residences went up 13%.

Coastal communities, overall, didn’t fare that well in the first quarter — however, Westchester saw a whopping 175% increase in sales but the pool of condo sales is still small, increasing from four to 11 sales. The most notable price increases took place in Malibu and Santa Monica (single family residences) and Venice (condos).

We’ll see how the year unfolds, but neighborhoods to watch continue to be Sherman Oaks, Eagle Rock, Atwater, Hawthorne, and Monrovia.

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What is in your wallet?
Mortgage rates are still moving down….that’s not a big surprise. Based on tracking national indexes, it was noted that with the manufacturing index posting a decline, and the services index moving upward, both indices remain above 50, which indicates that each of the two segments of the economy continues to grow.

While only 160,000 new jobs were created last month, with minor downward revisions to previous months. The unemployment rate remained steady at 5.0% even with the participation and size of the labor force slipping downward slightly. But that actually helped the mortgage rates last week with lower rate near the best levels of the year.
Key to affordability for first-time buyers are lower-interest loans, and that appears to still be on the table. Yes, prices are moving upward, faster in some areas than others, and inventory is slightly improving on the Westside in Los Angeles. “It’s not much, but any upward movement in inventory is a welcome sign,” Carole Schiffer noted. “With lower interest rates, we hope to see stronger demand from first-time buyers. And that will help keep more $$ in homebuyers’ wallets.”

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What is happening with me and my business and life? I am very busy working on selling my lovely new listing at 2120 Dean Circle in Mountaingate. It has amazing views of both of the Mountaingate Country Club golf courses, city and ocean views, and is stunning. It is priced at $2,545,000. I also have another home in Mountaingate that http://www.facebook.com/CaroleSchifferRealtor should be ready for a new tenant sometime in June. Please let me know if you would like more information on these lovely homes or any other real estate needs.

As you may know, I am on the Board of the Coldwell Banker Community Foundation and we have organized and fun and tasty fund raising event. On Monday the 6th June, if you take the flyer from the attached link to the Brentwood Store ONLY of California Pizza Kitchen, and either eat there, order on line or have takeout, 20% of your bill will be given to the CB Foundation for the Children’s Hospital of Los Angeles!

As for the other parts of my life,…recently I attended a fun, fund raising event put on by the Center Theatre Group Affiliates, a Cabaret where they raised $133,000 in one evening! My family & I are busy planning the birthday surprise of a fun filled weekend for our Mom’s 94th birthday! My sister & her family are flying in from Canada, and she has no clue… Can’t wait to see her face when she sees them here.

Be sure to check out my web site, Caroleschiffer.com and my facebook page http://www.facebook.com/CaroleSchifferRealtor as well as my linked in page, caroleschiffer@linkedin.com

I would like to Subscribe to the SchifferLine

Timely Real Estate News……………………………….1 May 2016

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Federal Reserve keeps current rates, “no comment” about future
This may seem like a government reality TV series — the audience (bankers, mortgage lenders, borrowers, investors) breathlessly awaiting word from on-high — thumbs up or down? The Fed answered, sort of — no rate increases for April and offers “no comment” for June, the next time the panel meets.

The Fed’s assessment of the American economy was mixed. Officials contrasted the relatively strong labor market to the slowing growth in the overall economy, which has been hampered by sluggish business investment and exports. According to a statement released after the two-day meeting, the Fed expects “economic activity will expand at a moderate pace and labor market indicators will continue to strengthen,” The policy statement was adopted by a 9-1 vote.

While household income and confidence indicators all looked positive, the Fed officials viewed consumer spending, which has been the main engine of economic growth, had weakened since their last policy meeting in mid-March. In the eyes of analysts, however, as the no-rate increase policy continued for this month, the Fed’s new statement about the economy made a significant change in deleting a previous warning about risks from the global economic and financial developments that had roiled markets earlier this year.

Some took that as an indication that the central bank could raise rates as early as June.“ We shall have to wait and see,” Carole Schiffer stated. “My clients are always aware of the interest rates and measure their investments and purchases based on current trends. The prospect of rising interest rates always stimulates motivation to buy or sell now. We’re still in a very active market.”

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Pricing your home can be a challenging road if not careful
Let me put it to you this way — “pricing your home is both an art and an in specific science.” In a good market, houses go up in value, but the ‘things’ inside them do not necessarily as well….and if the market is telling you something, you better listen.

Fortunately, the real estate market is very transparent. We have officially recorded transfers of property data (closed escrows), and we have tools that enable us to track sales by area on a daily basis. We can provide consumers with excellent information about what nearby properties have sold for and what competitive properties are selling for.

What is happening today with the explosion of real estate search capabilities? The trap many buyers face is that online estimates of a home’s true value, may be way off. For example, Zillow has an average margin of error of a reported 8% at the least, meaning a home selling for $1 million, could be off by $80,000 and a $3 million home, it could be off by as much as $240,000. That’s huge.

Another mistake that homeowners make is that they look at what’s for sale (unsold) in their market and think that’s what the market is — not true: It’s what sold, not what’s listed. The other properties are your competition, and that is how I advise my clients to assess our listing (asking price).

We all have made improvements in our homes over time, but what many homeowners do is to overestimate the value of their amenities such as granite counters, bathroom finishes, high-end appliances, etc. Amenities do have value — don’t get me wrong —but they do not have the value that the majority of home owners want to ascribe to them. It can be very difficult for a seller to understand that buyers do not always, in fact generally may not attach the same monetary value to your granite counters that you do. Only an experienced real estate agent who knows your neighborhood is going to give you an objective, honest appraisal of their contribution to the home’s overall value.

Don’t think for one minute that if you have something that may not be “perfect”, buyers are not quick to discount the non-perfect item substantially more than the homeowner because they generally always do.

And finally, sellers are sometimes swayed by their “needs” — they price the home that delivers the amount of $$ they need to move out and on. Buyers could care less about your needs. And likewise, homeowners don’t give discounts on buyers’ needs either.

Today’s market brings us much more informed buyers (and sellers). The Internet is a wonderful tool that is prevalent in every decision-making process. I see it every day in my travels within the real estate world. “The Internet is useful and helpful in so many ways — and we at Coldwell Banker have the most robust and complete online support programs of any real estate company in the world today. We’re the best.” But at the end of the day, it comes down to personal service and knowledge. You’ll need an experienced, qualified, dedicated real estate agent to make the best deal and close it!“…like me!

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More Americans still regard real estate as their best investment choice.
According to the latest Gallup poll the best long-term investment is still real estate. For the last two years, Americans have believed that for long-term investment real estate is their best choice: Real estate has increased its lead over four other investment choices as well. Thirty-five percent of Americans now choose real estate, compared with 22 percent for stocks and mutual funds, 17 percent for gold, 15 percent for savings accounts/CDs and 7 percent for bonds.

Real estate and gold have switched positions over the last five years as gold prices tumbled and home sales recovered from the 2007-2009 housing market collapse. In August 2011, 34 percent of Americans named gold for the best investment for the long term, compared with 19 percent for real estate.

Stocks and mutual funds, in spite of making major gains in the past five years after the historic 2008 stock market crash, have struggled to gain favor in the public’s eyes. In August 2011, with the Dow Jones Industrial Average still below pre-crash levels, 17 percent of Americans chose stocks and mutual funds as the top long-term investment.

According to Gallup, the Dow in April 2016 is above its pre-crash high of 14,164 by more than 3,500 points, but the percentage choosing stocks or mutual funds as the best long-term strategy has grown only to 22 percent. That figure did reach 25 percent last April, but dipped slightly this year after the Dow’s roller-coaster ride in recent months.

Meanwhile, as the average sale price of new homes in the U.S. increased from $259,300 in August 2011 to $348,900 in February of this year, the percentage of Americans picking real estate as the best long-term investment almost doubled. During approximately the same time span — from August 2011 to April of this year — gold prices plunged from $1,910 to $1,254 per ounce, and the percentage thinking gold would be the best investment was cut in half.

Interesting sidebar to “why” real estate is tops…..Combined results from the 2015 and 2016 Gallup polls that asked about long-term investment preferences reveal some clear differences among key subgroups. Here are some highlights from the survey: 1) Men are more likely than women to think gold is the best investment. Women are more likely than men to favor

savings accounts. 2) College graduates are more than twice as likely as non-grads to favor stocks — 37 percent to 17 percent. Those without a degree are more likely than grads to favor gold (21 percent to 12 percent) and savings (19 percent to 8 percent) and 3) Americans younger than 30 are the least likely (26 percent) age group to think real estate is the best investing choice and are the most likely (26 percent) to favor savings.

Existing home sales up, new home sales not so much
It goes with the real estate territory: We often see what appears to be conflicting stories in our media all the time. For example, what happens nationally doesn’t always reflect what happens on the Westside of Los Angeles. Home prices may be up in some areas, down in another. Homes sales (think “volume”) is up in some, down in others. But in a series of reports released by highly respected data-gathering firms, we see these stories in our national media, too.

In data released last week, the Commerce Department stated new-home sales slipped 1.5% last month (March) to a seasonally adjusted annual rise of 511,000 units, reflecting a consecutive three month drop in housing starts. While sales are still running slightly ahead of last year at this time, builders are not seeing signs that give them much optimism either.

But on another front, the National Association of Realtors said last week that sales of existing homes rose 5.1% in March to a seasonally adjusted annual rate of 5.33 million, a partial rebound after a sudden drop in February.

Fewer existing properties are being listed for sale, causing prices to rise. The number of listings has dipped 1.5% over the past 12 months, despite a foundation of demand caused by lower mortgage rates and healthy hiring levels.

Prices dipped with sales declining in Western states where land always commands a higher premium. The median new-home sales price fell 1.8% from a year ago to $288,000. The market’s stalling momentum comes amid an incomplete recovery from the housing crash of almost a decade ago. New-home sales are significantly below the half-century

“It can be very confusing, I must admit”, Carole Schiffer stated. “You are reading the same national media as I am. Fortunately, I have access to the most up-to-date real estate data available in the market, and I pass the latest information to you in our mid-month SchifferLine. We have seen sales modulate this year, down slightly from last year, which featured several large sales in March of last year. This year is a slightly different picture with no sales over $30 million. We are seeing median sales prices working on both sides of the fence — some areas are up, some down.” The best gauge for your area are the comparables that reflect real sales, not estimates.

I will keep you posted with the latest information available. Or please give me a call at 310-442-1384.

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Less Americans own homes….effects of Great Recession linger
The rate that Americans own their homes fell in the first quarter to the third lowest on record, another indication that worsening finances as well as changing preferences since the Great Recession are altering behavior. The diminished interest, or ability, to own a home comes at a time when mortgage rates are low but home prices are climbing. Many economists point to the lingering effects of the 2007-2009 Great Recession when many lost much of their home equity and were under water.

The Commerce Department reported that home ownership fell to a seasonally adjusted 63.6% in the first quarter, marking the third lowest figure since the 63.5% low in the second quarter of 2015. The ownership rate was 67.8% in the quarter when the U.S. entered recession. Freddie Mac reported the benchmark 30-year fixed-rate mortgage rose to 3.66% in the week ending April 28. The 30-year mortgage has been below 4% throughout 2016, according to Freddie Mac data.

However, home prices are on the move, particularly out west. As we reported last week, home prices nationally rose at a 5.4% clip in the 12 months ending February. Some cities including Denver and Portland are seeing double-digit percentage increases.

Rents also are picking up as housing inventory lessens and landlords are responding to supply/demand and are raising rental prices to take advantage of the booming demand. According to Carole Schiffer, “…we’re seeing that all over the Westside. With inventories low, rentals are commanding higher and higher monthly rents. This is a very competitive market for all sectors for the Westside housing market….not always a good thing as affordability keeps declining.”

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Please check out my beautiful new listing at 2120 Dean Circle in Mountaingate. It is 5 bedrooms/4.5 baths, with an expanded dining room that seats 18 easily, has been updated extensively in the last few years, and has an amazing view of the two Mountaingate golf courses, the city, and on a clear day some ocean view. The asking price is $2,545,000. You can see the photos on my web site, caroleschiffer.com

Happy Cinco De Mayo!

Happy Mother’s Day!

I would like to Subscribe to the SchifferLine

Timely Real Estate News………………………………15 April 2016

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First quarter dips but it’s not all bad news….

Numbers can be deceiving and numbing, too. When I scan the sales volume and median sales prices for the first quarter in the communities I report on, I might get a bit down because sales were down by almost 5% for the first three months of 2016. But, wait! Sales were actually up in four of the five communities — Beverly Hills was up $23 million over the first quarter in 2015…Beverly Hills Post Office was up $19 million, Westwood/Century City was up $29 million and Brentwood was up $14 million. So, what gives? Bel-Air was up $88 million — but down $112 million from the previous first quarter in 2015 of $200 million. But a huge sale of $46,260,000 in Bel-Air that occurred in March 2015 skewed the comparison for this year. Otherwise, Bel-Air would have been ahead also.

Large estate sales in Bel-Air during the first three months of both 2014 and 2015 brought the comparison volumes for this year down, of course, but there were other dips, too, in median sales prices. Beverly Hills was off 8% for year-to-date median sales prices through March 31, Bel Air was down 24%, Westwood/Century City was down 4% and Brentwood was down 7%….only Beverly Hills Post Office was positive at 45% median sales price increase over last year’s first quarter. “What we’re seeing is adjustments in how the first quarter’s economy affected everything in the U.S. housing market,” Carole Schiffer stated. “We can’t look at any one segment of the market, like sales volume, and come to a conclusion. We’re still in the early part of 2016, and the Spring Selling season is starting strong, at least from my view.”

One of the hot areas on the Westside is Culver City. The median sales price for a home in Culver City for March was $1.107 million, up from $970,000 a year ago. Median sales prices for the first quarter came in at $1.047 million, up from $950,000 a year ago. Sales are low in Culver City — with $36 million in 2015 but down to $32 million through three months of 2016. The school district is one of the reasons for the increase in value of real estate in this lovely community. The arts and restaurant district are clear demonstrations of the changes that have taken place in this community over the last few years!

What’s important….
What will be important to watch for as far as tracking prices on the Westside, which has always been one of the leaders in the U.S. on pushing home prices upward, will be to see how the median sales prices hold up through April. Comparing median sales prices for March 2016 vs. March 2015, Beverly Hills was down 19%, BHPO was up 65%, as they have bene up all of 2016….Bel-Air was down 38%, Westwood/Century City was down 24% and Brentwood was down 12%.

But let’s be clear: These are median prices, not specific prices that may be in your neighborhood. The MLS, which provides this data, does a good job in tracking home sales, but none of the private sales are included. I cover all of these private sales in my Quarterly Update which you received on April 1. If you haven’t received it — check out my website: www.caroleschiffer.com….Quarterly Update. You will find the complete archive of all of our SchifferLine editions as well as the quarterly updates for each community I cover.

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We can’t keep up….new construction can’t meet rental demand
If you have kids or grand kids and they’re complaining about a lack of affordable housing, believe them. It’s happening all over Los Angeles and Orange Counties. If this is one their reasons for wanting to move back home, they may not be kidding.

According to the USC Casden Multifamily forecast which was released last week, sky-high apartment rents in Southern California are expected to climb further in coming years; as construction fails to keep up with population and job growth. The average rent in Los Angeles County is expected to hit $1,416 a month in 2018, an 8.3% jump from last year, while in Orange County, average rents are likely to rise 9.4% to an average of $1,736.

According to the forecast, completed by Beacon Economics and USC’s Lusk Center for Real Estate, the projections come even as developers are building. Permits for more than 38,000 multifamily units were pulled last year across Los Angeles, Orange, San Bernardino, Riverside and San Diego counties — the most since before the recession, But much of the new supply is on the pricey end, and economists say much more construction is needed because California has consistently built too few units relative to population growth.

Last year, a report released by the California Housing Partnership Corp. said Los Angeles County needed more than 500,000 additional below-market rental homes if low-income residents were not to live beyond their means or in overcrowded apartments.

L.A. County rents rose nearly 5% to $1,307 last year from 2014, a pace that will slow to 3.1% this year, 2.4% in 2017 and 2.5% in 2018, according to the forecast. A similar slowdown is expected in other Southern California markets.

“We have been reporting the trend of kids moving back home for some time,” Carole Schiffer said, “and based on our current situation with high demand and low supply in affordable housing, that’s not going change much in the future.” So, mom and dad, what to do?

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Urban Land Institute issues forecast. Highlights
The Urban Land Institute released its ninth semi-annual Real Estate Consensus Forecast last week, a compilation of data based on a survey of 48 analysts and economists from 36 real estate organizations. The resulting three-year projections (2016 through 2018) in the areas of GDP growth, vacancy rates, housing starts and prices are compared to past years’ numbers up to 2004 as well as a 20-year baseline average. The reported numbers are the median of the collected forecasts.

Although much of the forecast emphasized commercial space, here the focus will be on what was said about residential real estate and broad economic indicators. Economic state and predictions….Overall, the economy is expected to continue expanding, but analysts are projecting a slower growth pace than we’ve experienced over the past two years. The real GDP growth has hovered at or below the 20-year average since 2010 when it climbed out of the negative.

The economy is expected to grow but at a slower rate, continuously falling below the long-term average, GDP growth is predicted to decline slightly from 2015 to 2016 and marginally fluctuate into 2018. Employment growth, which also bottomed out in 2009 with 5 million jobs lost, is expected to remain above the 20-year average but decline between 2015 and 2016 by about 11 percent to 2.5 million jobs gained. That number is expected to continue downward, with a predicted 1.5 million jobs gained in 2018 (the lowest annual growth in eight years).

In real estate, with the exception of single-family housing starts and other factors more specific to commercial real estate, most indicators specific to residential are predicted to be better than their 20-year averages in 2016. And home prices are expected to decline slightly during the next two years for existing-homes.

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Keep your home in top shape with eight simple tasks that you can do yourself:

1. Test your smoke detectors and carbon monoxide alarms. Change batteries every 6 months when we
change our clocks.
2. Drain approximately 2 gallons from your water heater to eliminate sediment.
3. Clean your clothes dryer vent duct (the lint trap should be cleaned out after every load.. Often
overlooked…but a big cause of fires
4. Vacuum your bathroom vent covers.
5. Replace or clean your furnace filter. This is an easy job.
6. Clean your refrigerator’s condenser coils to keep it operating efficiently.
8. Clean around your air conditioning compressors and make sure that it gets sufficient air flow. t

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Fed faces challenges…
The Fed is facing a challenging balancing act right now. The U.S. economy continues to grow, which theoretically means that we will be facing increasing inflationary pressures. However, the rest of the globe continues to struggle. Central banks continue to attempt to boost their economies, while our Fed works to keep our economic growth on track. Last week saw money flowing into Treasuries which reinforced perceptions of fewer rate increases this year. This led to lower mortgage rates mid-week, with rates then trending slowly back upward.

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What’s coming up????

I am furiously looking for sellers of Canyon homes in Bel Air Crest! Like most agents (I know I get those post cards too), I have a number of buyers anxious to move into the community, so if you are considering selling, please contact me… carole@caroleschiffer.com or 310 442-1384. Also come the end of the month, I have a fabulous home in Mountaingate coming on the market. It is 4/4.5 in great condition with views of both golf courses at the Country Club as well as great city views. We will be asking $2,545,000…. So if you know anyone that would like to see it, again, please give me a call. We cannot get into it until the end of the month.

We are also starting to organize some fun events for next month, when my Mom turns 94!

Timely Real Estate News……………………………15 March 2016

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Wear ‘the green’ for good luck. Everyone’s Irish on St. Patrick’s Day, March 17

 

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In the real estate world, it’s all relative….sales still up

Buffeted by a slowing economy in the fourth quarter, where the GDP just reached 1%, the real estate market is at least making some headway. Not a lot, mind you, but enough to show that the five communities I report on each month are moving in a positive direction — as of February 2016 sales volume was 2.9% ahead of where we were last year.

Sales volume for Beverly Hills, Beverly Hills Post Office, Bel-Air, Westwood/Century City, and Brentwood was $386 million vs. $375 million a year ago. But two years ago, we were at $405 million for the first two months of the year, meaning that we are trending “flat” in terms of overall sales activity. Why? Lack of inventory is the big reason, of course, which means that lower unit sales are offset by higher prices. And the sales volumes in each community can vary greatly between one year and the next and even between one month and the next. For example, for the first two months of this year, BHPO volume was up over $27 million compared to a year ago, while Bel-Air was down $35 million.

Pacific Palisades’ volume was up 25% for the first two months of this year at $109 million, which is not included in the above totals.

One of the key indicators

Of course, is year-to-date Median Sales Prices, which have always provided the better measurement of how we are doing. Beverly Hills and Beverly Hills Post Office are showing strength again. Beverly Hills’s median sales price is up 30% at $4.830 million….for the two months of this year compared to a year ago of $3.700 million. BHPO is up to $3.395 million or up 58% for the same period. Westwood/Century City is up 2%, but Bel-Air is down 2% and Brentwood is down 8%. Pacific Palisades remains even with last year’s median sale price at $2.700 million (year-to-date).

Comparing this February to February 2015….

Beverly Hills median sales prices grew significantly from $3.955 million to $6.825 million, a 72% increase….and BHPO went from $2.000 million to $2.795 million, a 39% increase. Bel-Air was up 7%, Westwood/Century City was up 14%. Brentwood was down 3% and Pacific Palisades was down 11%. As you can see there is a lot of fluctuation between the communities, even though we’re very contiguous and clustered in the same Westside enclave, prices and demand differ between each area. “Brand” (think “address”) has much to do with choices buyers make, but frankly, there isn’t a community (brand) this isn’t top notch in my ‘neck of the woods’. The other thing we all need to remember is that a large sale or two will definitely skew all of these numbers.

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As Coldwell Banker sees it….
The top Previews agents meet quarterly to review what is happening in the high end of the real estate front in the
Los Angeles area. At our meeting a few weeks ago, a bus load of Previews agents bused up from Orange Country, so we were also able to gain a glance at the high end market in the OC! The oft repeated mantra “pricing is the key to selling homes in any market” was a constant theme throughout the entire meeting. The other overall comment that was made was the low level of inventory throughout the entire market, except in the upper high end.

Locally, what we are seeing is that there are some very hot markets and some markets, not so hot. Hancock Park is one of the more active markets today — prices are increasing rapidly in this tony section of Los Angeles. Hancock Park is attracting buyers who are seeing more ‘value’ for their money in this well-established neighborhood.

In other areas, it was reported that Malibu is “soft” but areas near Silicon Beach such as Venice and Playa Vista & Mar Vista are hot and strong. . And overall, the market for $10 million homes and up is not that strong with the buyers “sitting on the sidelines watching what is going on”, but in the $1,000,000 to $5,000,000 sector, the market is very strong, in essence giving us two different markets. What came out of our Previews meeting is that there is a lot of money out there — wealthy US, Chinese, and German buyers are focusing on Los Angeles and San Francisco. We’re fortunate to have what buyers want — they want quality, location, choice, and yes, weather.

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Millennials are making moves to the “Burbs”……
Millennials are on the move — not to urban centers, which heretofore have attracted this upwardly mobile generation. Their passions for culture, car-less city-life, and intimate urban landscapes were their choices over a suburban lifestyle found outside urban cores. Not so much today.

For the third year in a row — millennials comprised the largest number of recent homebuyers — 35% of all buyers. Younger buyers seem to be shifting from seeking homes in urban city centers to the more sedate suburbs. According to the 2015 National Association of Realtors (NAR) survey the share of millennials buying in an urban area decreased to 17% from 21%. Also, fewer millennials purchased multifamily homes than last year (10 % instead of 15 %).

Overall, the majority of buyers in all generations continue to purchase a single-family home in a suburban area, and the younger the buyer, the older the home they purchased. “The median age of a millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” said Lawrence Yun, NAR’s chief economist. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out. Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households,” he said.

Hot Spots….

Silicon Beach is driving a lot of new buyers into our Westside neighborhoods including Venice, Playa Vista, and Culver City. Mar Vista is becoming a ‘hot’ area and as I have said in the past, the farther East you go, you’re finding millennials moving in droves to these lower-priced homes. Since I started my real estate career in the Marina, I know how popular and active that market is today. If you want more information on what’s ‘hot’ in these areas, please call me at 310-442-1384.

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Getting ready to sell…better check out these handy tips
A lot of sellers still love their “castle’, and the thought of moving is sometimes a painful experience. But more often than not, I’ve run into homeowners who believe that they can just put a “For Sale” sign on their front lawn and that will do the trick. It doesn’t. I have found that a great location can, indeed, make the difference when it comes to “days on market” — but in today’s competitive climate, how your home presents itself to buyers will determine the final selling price.

When you’re ready to sell your home, make sure potential buyers see it at its best. Here are the top ways to fix up the appearance of your home without investing a lot of money. A little time and effort now will pay big dividends at closing.

Landscaping — Trim the grass and make sure all flowerbeds are freshly mulched and free of weeds. Prune overgrown shrubs, especially if they’re hiding windows or blocking the entryway. Fresh flowers go a long way in giving our homes a new look.

Fences — Reinforce sagging gutters and straighten crooked fences. Make sure the gutters are cleared of obstructions and the soil isn’t washed out around downspouts. A quick power washing will brighten fences, driveways and walkways. Clear away clutter like bikes, tools and toys. Use weed killer on grass and weeds that sprout in pavement cracks. Keep edges neat with a weed eater or edger.

Front Door — Freshen the door and trim with a new coat of paint. Tighten loose doorknobs, oil squeaky hinges and make sure the doorbell works. Clean any furniture or outside decorations. Add a colorful potted plant or a new doormat.

Foyer — Shampoo the rug or scrub and wax the floor. Add a fresh area rug and make sure it has a nonskid surface for safety. Hang a mirror to make your entry look larger and brighter.

Kitchen — Set a warm, inviting mood by keeping countertops free of clutter and adding decorative canisters or a scented candle. Clean out the refrigerator, degrease the oven, wipe down cabinet doors and keep the sink shining.

Bathrooms — Make sure your bathrooms sparkle. Clear countertops of unnecessary clutter. Replace discolored or damaged caulking. Fix dripping faucets and leaky toilets.

Closets — Organize the contents to make your closets appear larger. Donate unwanted items to charity and store what’s left in stackable plastic totes to maintain a neat, tidy appearance.

Garage – This is the time to sort through all the junk and decide what to keep and what to give away. Use easy-to-assemble storage shelves to stow tools and sporting goods; wall hangers for garden hose, blowers and other equipment.

Lighting — Replace burned out bulbs and clean fixtures, inside and out. . Consider replacing dated fixtures in the most visible locations. Install indoor track lighting to highlight artwork and open drapes and blinds to let in natural light. Outside use landscape lighting to accentuate architectural features.

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Los Angeles is joining a club it may not want to join….
Los Angeles is now the eighth most expensive city in the world for tourists and foreign business people. In a study released last week a rising U.S. dollar has pushed the City of Angels ahead of pricey metropolises including Tokyo and Shanghai.

Simon Baptist, chief economist at EIU, said in an interview that for Angelenos, the cost of goods and services in fact is not rising much because inflation has remained relatively low. But the sharp appreciation of the dollar against many other currencies since mid-2014 is making many American cities relatively more expensive for foreigners. And that could cut into the number of tourists coming to Southern California and curb their appetite for purchases.

The Worldwide Cost of Living survey, which has been conducted for more than 30 years, looks at prices of 400 goods and services, though it does not include the cost of accommodations.

“We know that international tourist arrival [numbers] are quite sensitive to this,” said Baptist. “They are less likely to come to the U.S., and those that do are likely to spend less.”Los Angeles welcomed a record 6.7 million foreign visitors last year, up 3.4% over 2014, and they spent $6.4 billion, the city said. Mexico, China, Canada, Australia and the United Kingdom were the top sources of overseas visitors. While Mexico supplies the most foreign tourists, China’s numbers are growing the fastest of any country, up more than 13% last year to 779,000.

On the list of 133 cities compiled by the Economist Intelligence Unit Singapore, Los Angeles, which ranked 27th last year — is now only slightly less expensive than New York, which ranked 7th. Singapore remains the world’s most expensive place for visitors and expats, followed by Zurich, Hong Kong, Geneva, Paris and London. The less expensive cities were Lusaka, Zambia; Bangalore, India; and Mumbai.

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Fashion trends transcend to interior design
For Coldwell Banker’s Previews International, we are immersed in the world of luxury real estate, and so it is natural to ask: “Which fashion trends will cross over into the world of home decor?” After all, fashion and interior design have been closely linked for decades. According to New York City-based designer, Phillip Thomas, “…there is an undeniable link between the worlds of interior design and fashion. Each pushes the other in new directions by the use of colors, patterns, and texture. You often see fashion designers crossing the line into interior design by the creation of homes collections including furniture and fabrics.”

He listed five major trends where fashion crosses over into luxury interior design….1) Feminine Romanticism: “I see this trend manifesting itself in interior design with beautiful florals.” 2) Sparkle: “By sparkle, it was not just the use of metallics, like golds and silvers, but also the use of shimmer and reflectivity. In interior design, this trend is apparent in fabrics, embroideries and trims that incorporate sequins, to wall coverings and specialty plaster finishes with metallic elements or contrasting sheens.” 3) Tie Dye: “The runways also saw the resurgence of tie dye which is often indicative of the relaxed appeal of the summer wardrobe and an offshoot of the street art influence seen in 2015 collections. Tie dye has made it in to fabrics and wall coverings from designers both in the United States, to European houses. Gauzy linens with tie die motifs, for example, invigorate existing summer spaces breathing new energy.”4) Futurism-Silver: “The fashion runways continued this love for grey by featuring textured metallic’s, such as mirrors and lame, in their fashions. This story has been interpreted in interiors through the use of materials such as glass and mirror which have had a renaissance based on production innovations that have allowed for the creation of new and dynamic materials.” 5) Stripes: “Although quite simple in concept, stripes can often be a challenge, as colors or proportions can impact the end result. Interior designers are using stripes interpreting them new and bold manners. Striped wallpapers are used and cut in asymmetric manners to create fractured wall surfaces with depth and movement.”

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Life continues to be good and busy.

I have a number of new listings coming up and am working with my sellers in helping them get their homes ready to put on the market plus working on my existing escrows getting ready to close. In the mean time, I am also working on my house, installing outdoor lighting in my garden, painting the exterior of the house, and removing and planting some new trees and flowers. We are also working on my new web site, which I invite you to visit.. caroleschiffer.com, and to Face Book me… www.facebook.com/CaroleSchifferRealtor.

I am here to assist you with all of your real estate needs, so please do get in touch with me.. Carole@caroleschiffer.com or 310 442-1384.

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