Timely Real Estate News……………….15 December 2018
Merry Christmas and Kwanza!
It’s a joyous time of year. I love the joy of the holidays and rejoice in the good fortune I have had this year. However, you celebrate the holidays. I want to wish each of you the warmest of holiday greetings, and I look forward to seeing you in 2019!
Housing market stumbles along…
I wouldn’t say that this month’s stats are like all the others, it just feels like it. Median sales prices in some communities are up, some haven’t moved the needle this year, and one is down. For the five communities I report on each month in The Schiffer Line — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood, sales volume remains stuck in low gear, 6.6% behind last year’s volume. Impressive, though, is that sales volume is $3.2 billion though November, but down compared to $3.5 billion a year ago.
That is to be expected. We are seeing a lot of buyers at open houses, and I had my best month of the year this December, but higher interest rates, high prices, and continued low inventory plague our Westside housing market. We are not alone. Basically, it is the same picture across the country today and with the stock market with its highs and lows from one day to the next, we end the year curious as to what the new year will bring, but also know that we here in West Los Angeles are still in a strong housing market.
Median sales prices inch higher
November turned out to be an unusual month regarding median sales prices. Usually, I’ll see three communities up, two down, and then vice versa the next month. But looking at MSP through the 11 months for 2018, Only Bel-Air/Holmby Hills has moved ahead of the other four cities — with a 18% increase in median sale price, resting at $2.715 million, over last year at this time. Two cities — Beverly Hills — at $6,000 million, and Brentwood, at $3,187 million had “no increase” …Westwood/Century City was up a meager 1% to $2.278 million. Beverly Hills Post Office was down 16% compared to last year at $2.767 million. Culver City, one of the cities I also serve was up 9% in median sales price, at $1.310 million.
I regard year-to-date median sales prices as the best barometer to understand what’s trending on the Westside. As we near the end of 2018, the housing market is in somewhat of a flat mode’ from an MSP perspective. We are not moving the needle much, and it’s not the buyers’ fault., they are there, but in somewhat of a more cautious mode. On the other hand, we are still seeing some rather large sales in our communities.
For example, Beverly Hills had three homes over $10 million sold in November, Bel-Air/Holmby Hills had two large sales of $19 million and $20 million. But at the same time, we’re seeing substantial drops in sales volume — Beverly Hills was down over $140 million in total sales through November compared to a year ago. BHPO was down $80 million in volume, Bel-Air/Holmby Hills was down $60 million and Brentwood was down $9 million. Only Culver City was up $67 million from 2017. Please remember that these numbers also only reflect the sales through the multiple listing service, and as such do not include any private sales.
One of the things I do every day is to run a “hot sheet” from the MLS for all of the transactions on the Westside. This includes new listings, price reductions, properties going into escrow, and closed escrows. The categories include single family residences, condos, leases, and land. With very few exceptions, I am still seeing about 60 % properties in all categories close escrow at either over asking price or at the asking price. In fact, I just closed escrow on a home in Bel Air for $26,000 over asking!
As I have reported in previous Schiffer Line issues, economists are predicting a flatter 2019, with the GDP coming in a 2% and at 1% for 2020. However, a solution to the trade tariff wars going on now with China and steady interest rates, we could see a nice bump next year.
Understanding fires and their aftermath…
We have a habit of taking for granted that there will always be a fire season, except now, with the change in weather patterns, etc. fire season is an all year-long event. What we really haven’t focused on is what happens to these scorched lands after the fires are put out. As reported recently in the Los Angeles Times, there is a fascinating lesson to be learned in what happens to the blackened soil.
For example, the likelihood of runoff and erosion doubles after fires in urbanized areas, because recently scorched soils become hydrophobic, meaning they repel water. Fires cook the waxes that are natural to our soils. When these waxes cool, they coat the first inch of soil with a repellent layer, stopping water from infiltrating the soil.
So, when the rains come, instead of soaking into the ground, the water streams over the top, jamming storm water drainage systems with mud and debris and sending torrents of runoff into yards, streets and even homes, as with the devastating mudslides after the Thomas fire in Montecito that killed 21 in January.
Although most soils lose their repellency within a year, some may stay hydrophobic for up to six years, depending on the fire’s intensity and the size of a soil’s particles. Please resist the urge to dump mulch on the property. It won’t stop erosion, but it will stifle the new growth of weeds and other seeds that are crucial to holding the damaged soil in place. We have much to learn about our Earth and how we manage our communities and growth.
Go Native. Protect natural soils.
We live in a semi-arid desert. It is called Los Angeles and its environs. You wouldn’t think that when you drive by neighborhoods where there is much vegetation and beautifully landscaped gardens and lawns. How can we transition to a more user-friendly environment?
A couple of things: 1) Plant native now according to the California Native Plant Society. If you’re in a scorched area, protect the fragile soils, feed and shelter displaced creatures, and discourage future fires. 2) Don’t jump to re-landscaping with non-native plants as that will prevent the natural healing in the soil and by planting native plant material. You will be protecting the habitat for animals displaced by the fire. They’re homeless, too.
As the Plant Society points out, Cleveland Sage, a.k.a. Blue Sage, is one of the most fragrant native salvias, drought-tolerant, great on hillsides and highly popular with hummingbirds and bees. Shrubs like lemonade berry, coffee berry and Christmas berry are like supermarkets for birds.
Unlike many invasive species, California’s dry climate forced native plants to develop deep root systems so they can find water far in the ground. That extensive root structure also keeps hillsides stable and soil from washing away. So, whether you’re facing re-landscaping or thinking about what to do next with your property, Go Native.
Homeowners stress out…home repair challenges
DIY is a popular theme today. Doing It Yourself may sound like the perfect solution for your home repair needs, but in a national survey, it is not working out that way. It was found that owners stressed out from surprise home repairs.
In the first year of ownership, 44% of homeowners say they experienced an unexpected home repair. 12% said they experienced a surprise repair within their first month of moving in, according to a new NerdWallet survey of about 2,000 U.S. adults.
Nearly half—or 48% — of surveyed American homeowners say unexpected home repair costs have caused them anxiety. 31 % of homeowners say they do not have money set aside for home repairs or improvements.
The survey also revealed that many homeowners who wandered down the DIY path had nightmares, losing sleep, not to mention money for screwing up what might have been a simple job for an expert. The survey concludes — keep an emergency fund, hire experts for more-than-simple tasks, and do your regular maintenance to insure you don’t experience costly repairs.
Keeping a watchful eye….
One of the many lessons I have learned throughout my real estate career is the importance of home maintenance. Many times, we get used to conditions in our homes, and neglect taking care of them, and trust me that neglect can sometimes come back and bite us.
These items can include cracked windows, windows or doors that don’t close properly, a leak from a toilet when the toilet/leak is fixed but any water that might have run downstairs or into the walls could develop mold. Getting a regular termite inspection, maintaining your roof and paint. These are some of the items that we as homeowners should be checking and fixing on a regular basis.
With the holidays here and amid the rush of shopping, parties, entertaining, and
spending time with family and friends, we don’t always take the time to just stop and smell the roses. Please enjoy all that our life gives us….it is so short.
I hope you have a wonderful holiday and all of your wishes and prayers come true!
What’s coming up?
Come the first of year I have some new listings for lease or sale.
Keep checking out my web site: caroleschiffer.com and my free app if you are curious to know what the house next door is selling for or if you just want to keep track of what’s going on in your neighborhood.