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

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U.S. Supreme Court ends eviction moratorium for most states
The Supreme Court ended the Centers for Disease Control and Prevention (CDC’s) eviction moratorium last Thursday, giving much-needed relief to America’s small housing providers facing financial hardship for more than a year.

 

In a 6-3 ruling, a majority of justices agreed that the stay on the lower court’s order finding the CDC’s eviction moratorium to be unlawful and was no longer justified.

In their order, the justices wrote, “The moratorium has put the applicants, along with millions of landlords across the country, at risk of irreparable harm by depriving them of rent payments with no guarantee of eventual recovery”.

Despite the CDC’s determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means.” The case was brought by the Georgia and Alabama Associations of Realtors and other property providers.

The National Association of Realtors (NAR) stated that no housing provider wants to evict a tenant—it is always a last resort and reserved for the rarest cases. The NAR added that the best solution for all parties is rental assistance, and all energy should go toward its swift distribution of nearly $50 billion of aid that is now available to cover up to a year-and-a-half of combined back and future rent and utilities for struggling tenants—and every state has started a program to distribute the funds. It will be up to Congress to determine how this might be dealt with legislatively.

Many states and localities, including New York and California, have extended their own moratoriums, providing another layer of protection for some renters. In some places, judges, aware of the potential for large numbers of people to be put out on the street even as the pandemic intensifies again, have said they would slow-walk cases and make greater use of eviction diversion programs.

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Median sales prices increase across the country
Continued low levels of housing inventory, combined with record-low mortgage rates spurring housing demand, have caused an increase in median sales prices for existing single-family homes in all but one of 183 measured markets during the second quarter of 2021. That is according to the NAR’s latest national report, which reveals that 94% of 183 metro areas also experienced double-digit price increases (89% in the first quarter of 2021).

The median sales price of single-family existing homes rose 22.9% to $357,900, an increase of $66,800 from one year ago. All regions saw double-digit year-over-year price growth, which was led by the Northeast (21.8%), followed by the South (21.0%), West (20.9%), and Midwest (17.1%).

“Home price gains and the accompanying housing wealth accumulation have been spectacular over the past year, but are unlikely to be repeated in 2022,” said Lawrence Yun, NAR chief economist. “Housing affordability for first-time buyers is weakening,” Yun explained. “Unfortunately, the benefits of historically-low interest rates are overwhelmed by home prices rising too fast, thereby requiring a higher income in order to become a homeowner.”

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Homeowners love to see rising prices…. how about rising taxes?
Skyrocketing home prices over the last year may soon hit current homeowners in the form of property taxes. Housing experts are predicting property taxes to climb higher in 2021 than the 4% uptick in 2020.
Many city governments lost revenue during the COVID-19 pandemic and, as reassessments kick in, homeowners may be faced with a soaring bill. Property taxes are expected to increase by about 6.5% in 2021, according to realAppeal, a company that helps homeowners appeal property tax bills.

“Many of our clients who are older and living off of Social Security or pensions are beginning to wonder whether or not they’ll be able to remain in their homes as their property tax bills continue to rise,” Frank DiZenzo, chief revenue officer of real Appeal stated.

The 2020 housing boom may “take a couple years to fully translate into dramatically higher property tax bills because counties usually reassess property values every few years, often three-year intervals,” Brian Davis of Spark Rental, which provides software for housing providers, stated. About 34 states restrict how much taxes

About 34 states restrict how much taxes can increase in a single year too, providing some level of protection to homeowners. For example, California limits that assessed home values cannot grow more than 2% in a year until the home is sold. Forty-six states, as well as Washington, D.C., also offer some sort of homestead exemption, which can lower taxes for homeowners who use the home as a permanent residence

Here in Los Angeles, we should be receiving our property tax bills shortly. As a reminder, they are due by November 10th, delinquent on December 10th, and the second portion is due February 10th, and delinquent on April 10 ‘2022. Easy to remember – “No Darn Fooling Around”

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Mortgage rates move down…demand light
As demand lessened, mortgage rates moved down after rising for three weeks. But it didn’t seem to have much effect on mortgage demand. Total application volume rose 1.6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.03% from 3.06%, with points falling to 0.29 from 0.34 (including the origination fee) for loans with a 20% down payment.

“Treasury yields fell last week, as investors continue to anxiously monitor if the rise in COVID-19 cases in several states starts to dampen economic activity. Mortgage rates slightly declined as a result,” said economist Joel Kan..

Applications to refinance a home loan, which are highly rate sensitive, moved just 1% higher for the week and were 3% higher than the same week one year ago. The problem is that so many borrowers already refinanced at even lower rates last fall.

Applications for a loan to purchase a home increased 3% for the week but were 16% lower than the same week one year ago. Homebuyers are hitting an affordability wall, and the supply of homes for sale, while increasing slightly, is still far too low.

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Home sales rose for second consecutive month
According to the National Association of Realtors, existing-home sales rose in July, marking two consecutive months of increases. Three of the four major U.S. regions recorded modest month-over-month gains, and the fourth remained level. Figures varied from a year-over-year perspective as two regions saw gains, one witnessed a decline and one was unchanged.

Existing-home sales in the West grew 3.3%, posting an annual rate of $1,240,000 in July, equal to the level of a year ago. The median price in the West was $508,300, up 12.5% from July 2020.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 2.0% from June to a seasonally adjusted annual rate of 5.99 million in July. Sales inched up year-over-year, increasing 1.5% from a year ago (5.90 million in July 2020).

“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” said Lawrence Yun, NAR’s chief economist. “Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”

This is good news — we have been used to seeing home prices rise steadily on the Westside, but seeing the rise in actual home sales is encouraging. I have been consistently busy since the first of the year — buyers are out there scrambling for ‘deals’ — and there are some, but rare. Buyers are smarter these days — they do their research.

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Electric car-charging stations give garage powerful upgrade
It was bound to happen. With EVs becoming more and more popular, the need for recharging at home also became not only more popular, but a necessity. So, American ingenuity takes over, of course. So, what’s your EV plan?

The obvious place to charge your EV is the garage, but it takes some investigation and getting some sound advice as to how you install your charging station inside your garage. For example, in North America, all electric cars can be charged using a standard J1772 plug, sometimes called a “J” plug, said Tom Moloughney, an electric-vehicle industry consultant. Here is where it gets technical:

Tesla’s can be charged using a J plug but they need an adapter, which comes free with the vehicle. The amount of power a car gets during charging, measured in kilowatts, is a product of the outlet’s amperage, or the volume of electrons present, multiplied by voltage, which is the pressure of the electrical current, Moloughney explained. Standard household outlets are 120 volts with 15 or 20 amps, which is known as Level 1 charging, according to Moloughney. That translates to 3 to 5 miles of range per hour of charging, he said.

Montgomery noted that every electric vehicle can accept different levels of power, so you need to match the charger to what your car can accept. A car that charges at 80 amps on a 240-volt circuit can take 19.2 kilowatts an hour, he said. That translates to 50 to 60 miles of range per hour, roughly 10 to 20 times as fast as a Level 1 charging setup.

While it is common for homeowners to upgrade to 240-volt outlets, wall-mounted charging stations deliver a more powerful and faster charge. The cost of upgrading is typically several thousand dollars, including labor and a few hundred dollars for the charging station itself. But as we know, these EVs now is ‘part of the family’ and nothing is too good for your electric vehicle.

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Mountaingate — one of Southern California’s premier resort communities
Thousands of Sepulveda Pass commuters drive by Mountaingate every day. Located atop the serene, beautiful Santa Monica mountains, offering breath-taking views of the city, canyons and ocean and golf course, Mountaingate is one of Southern California best kept secrets, as residents like to tell everyone. And it is.

The first phase in the Mountaingate development was the Country Club and golf courses, built in 1970. The residential portion of the community slowly developed over the next two decades, and today is made up of town houses and single family homes. The entire community was developed as a condominium. The first homes, which are townhouse/condominiums, and the ones you see from the freeway were constructed in 1979.

What makes Mountaingate so special is, of course, its location. It like its neighboring community of Bel Air Crest, offer the best of both worlds… away from it all, yet minutes to either the Westside or the San Fernando Valley. One has to drive to the top of the mountain where the residential areas are located. The development features five-communities-in-one for a total of 307 residences — single-family dwellings and town homes/condominiums. There are three townhouse communities – The Vista, The Terrace, and The Ridge, and the remainder are single-family homes some of which are attached and others that are completely free standing. In addition, there is a small gated street with four homes.

With the exception of the street with only four homes on it, each community enjoys their own private community pool, and one street also offers tennis counts. Security is tight — most of the Mountaingate community is served by 24-hour guard-gated security force, buttressed by guard patrols throughout all the neighborhoods 24/7.

What certainly underpins the community’s resort atmosphere is, of course, is the private Mountaingate Country Club, which features two magnificent golf courses that weave their way through the canyons and arroyos of the property and is regarded as one of the top golf experiences in Los Angeles. The Club’s membership is separate from the residential communities, but many residents are members of the Club. Indeed, Mountaingate is a great place to call home! Please call or email me to assist you in finding your home there.

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What are some of the changes taking place?
As I am sure you know, many insurance companies have pulled out of the state in offering homeowners and fire insurance, look at the horrible fires currently going on in Northern California and Southern California. The loss of their coverage has wreaked havoc with many homeowners, causing them to pay increased premiums, sometimes with subpar companies and policies and/or self-insuring which can create problems also. All of this has not gone un-noticed by the members of the California legislature and I understand there is movement afoot to try and amend and/or correct the situation. This is not going to go away in a day, but hopefully there will be a solution that can make it better for all of us.

That being said, with the drought we are living with and will continue to experience, we are being strongly encouraged to be water-safe and aware, and to try to cut down the amount of water we use on a daily basis. Not sure if you have seen some of the media attention being given to those who are now showering every other day rather than daily – hope they have a good supply of deodorant! I know for myself; I have prepared to have the grass in my lovely garden turn brown as I cut back on the amount of watering.

In the meantime, my business continues to perk along with buyers looking to find their dream home and sellers ready to move on and effect changes in their lives. Currently, I have 2 townhouse homes in the Ridge community of Mountaingate (one is coming on the market in the next week or so). Both are 2 bedrooms/2.5 baths, plus a den. I also have a lovely 3/2.5 home available for lease in Bel Air Crest which is also coming on the market right after Labor Day. My other property is in the lovely community of Bel Air Park. It is a 5 bedroom/4.5 bath home with a HUGE back yard with room for a pool, and then some! It too is coming on the market right after Labor Day

Please get in touch with me for information about all of these wonderful properties and to make an appointment and/or to possibly add to the inventory of properties on the market and sell your home.
Carole Schiffer – 310 442-1384 ceschiffer@gmail.com carole@caroleschiffer.com

Please take care of yourself, wear those masks we have all come to hate wearing and if you haven’t already done so, please get that vaccine – not only is it good for you, but for the rest of us also!

 

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

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Sales volumes continue to climb to record highs
If there is a “pandemic effect” in real estate, we certainly must be in it now. Sales volumes for the five communities I report on in the Westside are up 81% to $3.440 billion through the first seven months of 2021, a number we have never reached at this time of year.
Sales volumes continued their rapid ascent — Beverly Hills sales volume increased by $374 million compared to 2021 at this time of year. Beverly Hills Post Office was up $207 million, Bel-Air/Holmby Hills was up $273 million, Westwood/Century City was up $191 million, and Brentwood was up $500 million. But the big winner on the Westside was Malibu and Malibu Beach, which saw sales climb $697 million through July compared to 2021, or a 146% increase.

What makes these numbers impressive is that the increased sales volumes are spread almost evenly across the board. No area was left out, and while high-end sales are certainly demonstrating their power in a market that struggled since 2018, we realize that the lack of a robust inventory is creating higher demand thus higher prices thus higher sales volumes for our area. Premium properties are driving up these sales — and they should. I continue to see strong interest from buyers who, while they might not be ready to move right now, they want to know what is out there. They feel, and rightly so, that if they’re going to be in the market to buy or sell, they can ill afford to wait if they think prices are going to remain steady. They aren’t.

However, we are seeing somewhat of a pull back from buyers in the last few weeks. So, in essence, the prices are continuing their climb but the sales volumes are a little less. Where there were multiple offers of perhaps 5 -1 0 on properties, there now are 2 – 3. Interest rates have been jumping around somewhat, but are lower again now, and the lenders are coming out with new programs every day. All in all, it makes for interesting times.

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Median sales prices show modest gains
The increase in sales volume is not necessarily being caused by median sales prices screaming through the roof. Not at all. For example, Beverly Hills, now sitting at $6.737 million median sales price (MSP) for the year, and Beverly Hills Post, at $3.395 million MSP, are only 4% higher than prices were a year ago, a modest increase

Westwood/Century City was only up 1% at $2.604 million for 2021, but Brentwood was up 21% at $4.057 million and Bel-Air/Holmby Hills was up 18% at $2.756 million.

Malibu Beach was up 28% for the year at $9.550, and Malibu was up 48% at $3.671 million. That is the ‘magic’ of Malibu — it has a ‘luster’ of its own.

Median sales prices are always the better measurement to see the health of our residential market. You can see that we are in a very strong market, and even though inflation reared its head this last week, highest in 20 years, it has not affected the stock market or the real estate market.

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One-third of home owners are “equity rich”
Words every homeowner loves to hear: Equity rich! Higher home prices are translating into comfortable cushions for those who own. Thirty-four % of residential properties in the U.S. with a mortgage were considered “equity rich” in the second quarter, which means the combined estimated amount of loans secured by the properties was at least 50% of its estimated market value, according to a new report from ATTOM Data Solutions. If you recall at the beginning of the Pandemic and we had the forbearance program, come into effect, there was a lot of conversation about how when this program was over, we would see a lot of properties that would go into foreclosure. I recall saying that due to the run up of prices, the situation would be different from when the market tanked in 2007 and 2008. The primary reason is because property owners have equity today when they did not have it then… BIG DIFFERENCE!

The numbers continue to grow, increasing from 31.2% in the first quarter and 27.5% in the second quarter of 2020. Huge home price jumps over the past year that helped millions of sellers earn profits also kicked in big-time during the second quarter for other owners who saw their typical equity improve more than at any time in the last two years according to ATTOM’s report. Instead of the virus pandemic harming homeowners, it’s helped create conditions that have boosted the balance sheets of households all across the country.

Every state saw equity-rich levels rise in the second quarter. Western and northeastern states saw the biggest improvement, led by Arizona (up from 16.3% in the first quarter of 2021 to 39.7% in the second quarter), Massachusetts (from 25.3% to 41.7%); New Hampshire (20.4% to 36.1%); and Rhode Island (21% to 36.4%), according to ATTOM Data Solutions’ report.

Overall, the states with the highest level of equity-rich homes were Idaho (54.2%) and California (53.8%). On a metro level, the areas with the highest share of mortgaged properties that were equity rich in the second quarter were: San Jose, Calif.: 69.4%; San Francisco: 64.9%; Los Angeles: 57.9%; Boise, Idaho: 57.4%; and San Diego: 54.3%.

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Loan performance index shows improvement
According to Core Logic, one of the nation’s leading real estate data firms, reported that in April 2021, 4.7% of mortgages were delinquent by at least 30 days or more including those in foreclosure. But that represents a 2.6% decrease in the overall delinquency rate compared with May 2020.

The Core Logic report noted that many are concerned about a pending foreclosure crisis when government provisions lift. Fortunately, the average homeowner in forbearance has sizable equity in their home, which has helped create an additional financial buffer for those struggling to make mortgage payments.

Thanks to these strong equity gains, and the availability of loan modifications and federal resources, we expect most borrowers have had enough support to stave off a foreclosure wave. Additionally, a recent CoreLogic survey of mortgage holders reports 85% of respondents said they maintained employment through the pandemic, which has helped many homeowners avoid delinquency and prevented a broad-scale mortgage crisis.

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Crypto Currency – What is the Status in today’s market?
What is happening on a scale not seen before according to the National Association of Realtors (NAR)— Bitcoin or cryptocurrency used for purchasing real estate. It is a fact that cryptocurrency has built considerable momentum over the last few years, particularly with the rising value of Bitcoin. Now that it is making a foray into the luxury real estate market, here is what you need to know today to be ready for tomorrow.

Buyers and sellers have to be on the same crypto-page. Both parties enter into negotiations with the understanding that Bitcoin, the most popular crypto currency in the market today, will be the vehicle for the transaction. Most clients who want to transact with cryptocurrency are currently looking and listing in the higher end of the real estate market, and many of them are overseas where there is a higher understanding of this new currency world.

Buyers and sellers who venture into the ‘crypto world’ are usually already indoctrinated and know the risks, but have supreme confidence in its financial stability. It is a trend that is now beginning to flourish in the higher-end market. The recent surge in value of Bitcoin has created a new category of buyers who are newly minted millionaires and entering the high-end market for the first time according to Realtor.com.

As an aside, there was a recent article in the Los Angeles Times, that you will be able to purchase your ticket for a movie at AMC with bit coins! Amazing!

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Lenders uncovering identity theft in mortgage reviews
Oops, you have a problem. You receive a call from your mortgage lender and yes, you cannot qualify for your loan. About 14.4 million adults are victims of identity theft each year. But many may not even realize it until they try to qualify for a loan of some type.

A financial review by a lender may be tripped up if the potential borrower’s identity has been taken, and their homebuying dreams could quickly be taken from them. “Identity theft is on the rise, and if you don’t pay attention, you could have a harsh awakening when applying for a mortgage to purchase a home,” cybersecurity expert Sandra Estok, author of the “Happily Ever Cyber!” book series, told realtor.com.

Identity theft can take many forms. Some criminals steal a Social Security number and then use it to open credit cards or loans in the person’s name. That can ruin a credit score, needed to qualify for a mortgage or a loan.

Home buyers should do advance work in ensuring their finances are up to par and have not been hacked, experts say. One proactive step to take before putting in an offer, or even before you consider looking at homes, is to review your credit report.

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Global vaccines bring foreign buyers back!
Foreign buyers return! Foreign homebuying activity has decreased significantly over the last year, but economists are bullish that a comeback is starting to emerge.

During the pandemic, foreign investment in American homes plunged 27%, the lowest level in a decade, according to a recent report from the National Association of Realtors. The global pandemic and travel restrictions are the culprits for the decrease, housing analysts have said. But as vaccines pick up globally, pent-up demand among foreign buyers is expected to be unleashed once again.

The most popular destinations for foreign real estate buyers between April 2020 and March 2021 were California, Florida, Texas, Arizona, New Jersey, and New York, according to data from the National Association of Realtors. Clients from China have been the top buyers of U.S. residential homes by sales dollar volume over the last decade.

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Hyperion treatment plant causes Santa Monica Bay crisis…
Problems at a Los Angeles sewage treatment plant that caused a massive spill into Santa Monica Bay last month have severely reduced the region’s water recycling ability, forcing officials to divert millions of gallons of clean drinking water at a time of worsening drought conditions, according to a recent Los Angeles Times article.

Even as California Gov. Gavin Newsom urges a voluntary 15% reduction in water usage, the Hyperion Water Reclamation Plant’s inability to fully treat sewage has forced local officials to divert drinking water to uses normally served by recycled water.

Among those is an effort to protect coastal aquifers from seawater contamination, as well as the irrigation of parks, cemeteries and golf courses across southwest Los Angeles County. The sudden loss of millions of gallons of recycled water has alarmed experts and raised new questions about the plant’s ability to function in a warming climate. The plant is currently rushing to fix the problem, but no final ‘end date’ for the crisis has been announced.

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Home classes rooms are ’staying home’…. changes on the Homefront
The pandemic accomplished one thing: The forced isolation brought significant more attention to people’s homes. Homes were not designed to be classrooms, and here we are, some 17 months into this pandemic, and students are still at home, some heading back to school, some on a hybrid.

But regardless, parents are now realizing that creating a healthy, functional educational environment for their children is not just a good idea during the pandemic — it’s good for families both emotionally as well as specially. That is why there is a big increase in homes now featuring educational areas for children…and adults.
For example, ‘learning spaces’ are the next big thing: Listings over $1 million in 2021 that mentioned a learning space had a median time on the market of 45 days, 12 days less than homes that didn’t mention a learning space, according to data from Realtor.com. In May of this year, 1,178 homes mentioned terms related to learning spaces, a 58% increase from the same period last year, according to the data.

Rooms are being re-purposed, or created (added on) to make room for a more inspirational learning area where the technology and environment all designed to support the student…of all ages.

This is happening, not just in higher-end homes that can convert a library or entertainment room to a ’new-style classroom’ — but in smaller homes where families realize the significance of creating a healthy, inviting area to learn and grow. With the growing mask controversy, I imagine this will continue as parents continue to struggle with the question of having their children be home schooled or return to the class room.

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Insurance Issues Continue to Dog Us!
As I am sure you are all aware, major insurance companies who in the past have covered both home owner & fire insurance policies for properties up and down the state have pulled out of offering that coverage. The horrible Dixie fire we are dealing with in Northern California is a prime example of what is going on. The sad part of this insurance situation is that the pulling of these policies is impacting not only properties in fire prone areas, but those like my mothers’ home in Beverlywood, near Century City which is not in a fire prone area, where we have had to secure new insurance coverage for her home until we sell it in a few months.

With the recent forecast by the Intergovernmental Panel on Climate Change of the United Nations of the effects of climate change on the world, and the now acknowledged year-round fire season, it is incumbent upon all of us to be ever so vigilant to make sure we protect our properties and are properly insured.

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How is the serge of new Corvid 19Delta Variant cases impacting us in the selling of real estate?
I have a private office so within my office itself, I do not have to don a mask but to if I go into the office proper, or anywhere in the building, we need to mask up again as we now have to do in more and more businesses. It is so sad to me that we are still dealing with this situation 17 months into and I hope everyone will do what they have to do to not only get their shot, but continue to practice safety for all.

At the beginning of Covid, we had very strict procedures that had to be followed in the showing of properties, I sincerely hope we don’t have to go back to those procedures.

Take care, be safe and enjoy your life and one another!

 

 

The SchifferLine
Timely Real Estate News……………………..1 August 2021

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Federal Reserve holds steady on interest rates
There is good news for mortgage rates and the housing industry. The Federal Reserve last week held its benchmark interest rate near zero and said the economy continues to progress despite concerns over the pandemic spread. As expected, the Federal Open Market Committee (FOMC) concluded its two-day meeting by keeping interest rates in a target range between zero and 0.25%.

Along with that, the committee said in an unanimously approved statement that the economy continues to “strengthen.” What this means for the mortgage business is that rates should not be moving up as many had predicted after the last inflation new

Despite the optimism about the economy, Chairman Jerome Powell said the Fed is nowhere near considering a rate hike. “Our approach here has been to be as transparent as we can”.
We have not reached substantial further progress yet,” he said. “We see ourselves having some ground to cover to get there.”

Powell indicated that substantial further progress on inflation and employment is the benchmark the Fed has set before it will tighten policy, which would mean slowing and stopping monthly bond purchases and ultimately raising interest rates. His statement noted only that “progress” has been made, and the FOMC will continue to watch conditions to see how close they get to the Fed’s goals.

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Strong demand pushed median home prices up in U.S.
As you have seen in past issues of The Schiffer Line I have discussed and shared with you the continuation of seeing median home prices climbing upward, especially in our Westside communities.

According to the National Association of Realtors (NAR), there continues to exist a strong demand which has pushed the median U.S. home price to a record high in June, though the national house-buying frenzy cooled slightly as supply ticked higher. Depending on the property and importantly the price point, I too have seen somewhat of a slowing of the demand. Yet, the buyers are there and when a property comes on the market that is ‘properly positioned” which means appropriate price for its location and condition, it sells very quickly and many times with multiple offers selling over asking price, thus raising the Barr for the next one that comes along.

Nationally, existing-home sales rose 1.4% in June from the prior month to a seasonally adjusted annual rate of 5.86 million. June sales rose 22.9% from a year earlier.

Also, nationally, the median existing-home price rose to $363,300, in June, up 23.4% from a year earlier, setting a record high, NAR said, extending steady price increases amid limited inventories.

Separate figures on the labor market showed that the number of people receiving jobless benefits fell to the lowest level since early in the pandemic as states withdrew from participation in federal pandemic relief. First-time applications, meanwhile, rose as supply constraints continued to dramatically impact home demand, thus raising prices as buyers enter hotly competitive bidding wars. The housing market boom, however, is easing slightly, as rising prices are prompting more homeowners to list their houses for sale. Homes sold in June received four offers on average, down from five offers the previous month, said Lawrence Yun, NAR’s chief economist.

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Will housing frenzy cool in coming months? Maybe.
According to the National Association of Realtors, there were 1.25 million homes for sale at the end of June, up 3.3% from May and down 18.8% from June 2020. At the current sales pace, there was a 2.6-month supply of homes on the market at the end of June.

Market watchers expect the housing frenzy to continue to cool in the coming months, as the number of homes for sale increases and high prices force some buyers out of the market.

Home builders however don’t believe we will continue to see the kinds of price increases we’ve seen in the last 12 months. As noted in the NAR survey, builders don’t believe these continued price hikes are sustainable.

First-time buyers or those who can only afford to make small down payments are struggling the most to compete. More than half of existing-home buyers in June who used mortgages to buy a property put at least 20% down, according to the NAR. Buyers are also making their offers stand out in this competitive market by agreeing to buy houses without contract terms that typically protect buyers, such as inspection requirements. Knowing that loan qualification and mortgage terms can possibly force potential buyers out of the market, lenders such as mine Simon Atik have and are creating more mortgages that have friendlier terms for those potential buyers with low down payment options. For more information, please contact me and I will be more than happy to connect you with my lender. 310- 442-1384.

Sales were especially strong at the high end of the market. Sales of homes that were priced at more than $1 million more than doubled in June compared with a year earlier.

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First-time buyers facing new hurdles — larger homes
It may not seem like a big issue — but the supply of entry-level homes, which Freddie Mac defines as homes up to 1,400 square feet, is near a five-decade low, and data on new construction om the National Association of Home Builders shows that single-family homes are significantly bigger than they were years ago.

Homeowners from previous generations had access to smaller homes at the start of their financial lives. In the late 1970s, an average of 418,000 new units of entry-level housing were built each year, according to data from Freddie Mac. By the 2010s, that number had fallen to 55,000 new units a year. For 2020, an estimated 65,000 new entry-level homes were completed.

Entry-Level Housing Supply Annual average number of new homes up to 1,400 square feet us declining, because as a result of the pandemic, homeowners want more space, which means they’re designing and building homes in excess of 1,400 square feet.

This phenomenon is affecting real estate in ten of the largest states, according to an analysis from Freddie Mac. In Florida, the share of homes with living areas up to 1,400 square feet was 58% of new housing supply in 1985. Thirty years later, the share plummeted to 12%. Housing sizes today dramatically affect home prices — whether or not they’re considered a ’starter home’. These numbers reflect a national story, not specifically local.

For example, a 1,400 square foot in Los Gatos, CA, is selling for between $1.7 million and $2.5 million, while a home the same size in Culver City is going for $1,082,000…hardly “starter-home price

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Is U.S. housing market losing its ‘mojo’ for foreign buyers?
Is it over? Are foreign buyers leaving the U.S. market? Well, not exactly. Nationally, foreign buyers purchased $54.4 billion worth of U.S. existing homes from April 2020 through March 2021, a 27% decrease from the previous 12-month period and the fourth consecutive annual decline in foreign investment in U.S. residential real estate.
That’s a big decrease. But there is a logical answer for some of this decrease. Foreign buyers purchased 107,000 properties, down 31% from the prior year, as the COVID-19 pandemic led to a strong global economic contraction and a decline in international tourist and business arrivals. As a result, the dollar and sales volumes are the lowest since 2011, when those figures were $66.4 billion and 210,800 properties, respectively.

In the NAR’s annual Profile of International Transactions, foreign buyers who resided in the U.S. as recent immigrants or who were holding visas that allowed them to live in the U.S., purchased $32.4 billion worth of U.S. existing homes, a 21% decrease from the prior year and representing 60% of the dollar volume of purchases. Foreign buyers who lived abroad purchased $22 billion worth of existing homes, down 33% from the 12 months prior and accounting for 40% of the dollar volume. International buyers accounted for 2.8% of the $5.8 trillion in existing-home sales during that time period.

I continue to see a strong influx of foreign buyers at my open houses and I’m getting calls from far away as Dubai, Turkey, and Europe. The pandemic obviously had a major impact on all data when comparing last year to this year. It will last for some time. Particularly as travel restrictions continue to exist in the light of the resurgence of Co

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“Au naturel” swimming pools are trending this summer
According to the Wall Street Journal, some homeowners will be swimming in their backyard pools au naturel. “The iconic, aqua-blue vessels of chlorine-treated water are starting to see competition from the leafy, greenish waters of natural pools” was the WSJ’s view of this growing trend.

With us experiencing the second summer of the pandemic, waiting lists for in-ground pools and a chlorine shortage are sparking interest in these so-called bio pools, which are chemical-free. Swimmers are invited to lounge, naiad-like, close to water mint and water lilies as dragonflies hover.

“Prices are going through the roof on chlorine tablets if you can even find them,” says one pool maintenance owner. “It doesn’t look like the demand is going to decrease.”

They are a tiny fraction of the U.S. residential pool market, which is dominated by pools that use chlorine and other chemicals to keep bacteria and microbes at bay. They are a sustainable choice, requiring less energy to operate.
The result is green water—somewhere between a mossy hue to a jade color. The roots of aquatic plants, such as water lilies, and materials like gravel create a naturally occurring ecosystem with biofilms called a regeneration zone. Water is kept clean and algae-free as it recirculates over the film of micro-organisms.

Newer technology replaces this regeneration zone with a smaller, self-contained, plant less biofilter, which uses material such as lava rock and gravel to build up a biofilm.

The appeal to homeowners is water free of chlorine and other chemicals that keep pool water bacteria-free. Natural pools cost about $125 a square foot, excluding decks, electrical and landscaping. That is about 10% more than installation costs for a chlorine pool. But they are slightly less expensive to maintain. A traditional 500-square-foot pool costs about $1,800 to $3,200 a year during a season, according to Home Advisor.

The energy costs for a natural pool are one-half to one-third of a traditional pool, from $35 to $50 a month, and there are no chemical costs. Natural pools can be made of a rubber membrane or gunite, and pool sides may be lined with river rock or special sandbags. You just want to jump right end — bringing Mother Nature to your backyard. Does this sound inviting to you?

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A view from top of the hill….
As a pioneer resident of Bel Air Crest since 1992, I have witnessed some dramatic events during the past 29 years. Yes, 29 years ago, BAC opened its doors as one of the most beautiful, gated communities in all of Los Angeles.
Most notably our community of 365 homes — both Custom and Canyon homes — has evolved into a close-knit group of homeowners who vigilantly guard their properties and community assets. What greeted us in those early days as we drove up Bel Air Crest Road, both North and South were young tree plantings and shrubbery that have now grown into mature, lush trees and are now surrounded by beautiful, landscaped gardens. We are finalizing the plans for the remodeling of the club house which will give us a new gym, party room, managers offices and rest rooms. Over the years we have added a children’s playground, doggy park, and a small pitch & putt golf course. Our exercise area and tennis courts continue to be magnets for our residents who call Bel Air Crest home.

We’ve had the rich and famous here — and still do, but our community was designed to provide a private enclave for those who appreciate privacy and luxury at the same time. We have been threatened repeatedly by fires a few times, but thanks to the LA Fire Department and our own volunteer emergency preparation committee which keep an eagle eye out for fires and any other emergencies including earthquakes. I urge you to PLEASE practice safety, in clearing brush around your property and to enforce our No Smoking rule in the community.

Being tucked away on top of the hills of the Santa Monica Mountains, we are fortunate to enjoy the spoils of a gated community, which prides itself on hospitality while keeping a vigilant eye on community safety and security yet being close to the major areas of Los Angeles proper.

I will be spotlighting various communities in the next issues of the Schiffer Line. Stay tuned to see which community will be

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What Does My Business Look Like?
As I have mentioned previously, I am busier than I have been in a long while. Every day I am getting calls from buyers who want to buy property that isn’t on the market. That leads to contacting potential sellers that might consider selling their home. I am also working with potential sellers discussing the value of their properties, dealing with the condition and what they might do to enhance their property prior to marketing it. Potential renters who are looking to lease a home.
I am also a mentor to new licenses (7) at the moment all of whom are in various stages of developing their careers Needless to say, this in addition to servicing my current listings and managing my escrows keep me hoping. I love the energy!!!

I also want to thank the residents of Bel Air Crest for their confidence in me to once again be one of the Canyon Home representatives to the Bel Air Crest Master Board of Directors. I very much appreciate the support. Please let me know if you have any issues or concerns that I can assist you with. I am here for you.

Also, with the variant and Covid 10 once again sweeping our country and city specifically, please take care, wear those masks and if you or someone you know has yet to be vaccinated, please do so. It is not only important for your health, but for all us.

 

 

 

 

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

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Sales volume continues upward….!
We’re seeing sales volumes never seen before in the communities I cover — record volumes keep climbing upward each month. For the five communities I regularly report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood — sales volume through the end of June 2021 was $2.619 billion, up 71%, compared to $1.523 billion in June 2020.

When comparing sales volume to pre-pandemic June 2019, sales were up 47% for June 2021 at $1.775 billion. Obviously, the pandemic depressed sales volume last year.

Please note: One must keep in mind that last year at this time, we were in the throes of the pandemic, and sales for June 2020 were down from 2019, so these large % increases you are seeing in today’s market will continue. The Federal Reserve believes we have a strong economy, and there is no expectation the Fed is going to moderate interest rates any time soon.

Is it going to calm down? We live in the land of supply and demand, and it is no surprise that demand is far outstripping inventory of single-family homes in these communities. I do not see where sales volumes are going to moderate back to previous years as the price of valuable real estate continues escalating upward. And combined with the latest inflation stats released this week, home prices will just continue rising — as does everything else.

Leading the sales volume increases was Brentwood, which has seen an increase of more than $384 million in sales through June, compared to last year. Beverly Hills had $250 million more in total sales volume, Bel-Air/Holmby Hills had $193 million more, Beverly Hills Post Office increased $160 million over 2020, and Westwood/Century City sales were $118 million over year-to-date sales for 2021.

Needless to say, we’re in the middle of a very hot selling season and are seeing buyers flooding the market. Lack of inventory is certainly causing most of the increased sales prices, but it also influenced by the perception that real estate in prime communities is one of the best investments one can make. That certainly is proven here now.

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Median sales prices continue their ‘mixed bag’
While sales volumes are heading upward also, and median sales prices have moved steadily upward, although not displaying the dramatic gains as in sales volumes For example, Brentwood, which had a booming June, showed a 14% increase in median sales prices at $4.114 million; Bel-Air/Holmby Hills had a 13% increase at $2.718 million; Beverly Hills was at $7.414 million, a 10% increase; Westwood/Century City’s median sale price through June was $2.582 million; and Beverly Hills Post Office was down 2% at $3.305 million.

Culver City, another community I cover, had a median sales price for June of $1.645 million on 30 transactions…this community, with its relatively low prices, has become one of the hottest markets in our area.

One of the key stats I look at is how original asking (or list) prices compare to the final sales price — where over-pricing plays a major factor in how sellers view their property’s value. As I noted in my quarterly newsletter, many homeowners tend to over price their homes because sellers see all of the robust sales taking place, especially on the Westside.

Two communities I cover have a good track record in pricing vs. final sales — Westwood/Century City actually recorded 101% of comparing original list price to final sales…. Brentwood which has received a great deal of activity this spring and early Summer, had a 99% comparison. The other areas were either 90% or 89% in the final sales price (compared to original asking price). Sellers who over price their homes from the outset soon learn that strategy doesn’t work…not today.

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High-end sales setting records — no surprise!
This year continues to be the best ever in high-end sales. There have been 535 closed sales of $5 million-plus so far this year, versus 252 at this time last year, up 112% Of these, 175 were $10 million-plus this year, and there were 81 at this time last year: up 175%.

In the $20 million-plus category, there were 44 sold compared to just 20 a year ago, up 120%. Just amazing! Please remember as mentioned in the previous article, one must keep in mind the impact that the pandemic had on prices all across the board so that needs to temper how we look at these stats.

Twelve (12) of these sales were $30 million-plus this year, versus 10 at this time last year. And eight were $40 million-plus, versus five at this time last year.

As of July 1, there are 123 pending sales of $5 million-plus, and 44 of these are $10 million-plus. Of the 44 sales of $20 plus million, the buyers are: 33 American, (75%).one Saudi, one Chinese, one Indonesian, one Canadian, one Danish, and one from India.

The areas of the 44 sales were: 12 in Malibu, 8 in Beverly Hills, 5 in BHPO, 4 each in Sunset Strip, Bel Air, Brentwood and Holmby Hills and 1 each in Westwood, Santa Monica and Palisades…16 of these properties were not officially listed when sold.

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Inflation is here — will it hurt the real estate market?
According to the Wall Street Journal this week, Americans should brace themselves for several years of higher inflation than they’ve seen in decades, according to economists who expect the robust post-pandemic economic recovery to fuel brisk price increases for a while.”

Economists surveyed this month by The Wall Street Journal raised their forecasts of how high inflation would go and for how long, compared with their previous expectations in April. But the burning question — will this impact the real estate market. Yes, it will have an effect, but there was no prediction as to how much — they only noted that prices are going up across the board, and that means housing costs will for sure. Buyers and renters are going to pay more for housing.

The respondents on average now expect a widely followed measure of inflation, which excludes volatile food and energy components, to be up 3.2% in the fourth quarter of 2021 from a year before. They forecast the annual rise to recede to slightly less than 2.3% a year in 2022 and 2023. That would mean an average annual increase of 2.58% from 2021 through 2023, putting inflation at levels last seen in 1993.

“We’re in a transitional phase right now,” said Joel Naroff, chief economist at Naroff Economics LLC. “We are transitioning to a higher period of inflation and interest rates than we’ve had over the last 20 years.”

The inflation measure—the Commerce Department’s core price index of personal-consumption expenditures—jumped 3.4% in May from a year earlier, the biggest increase since the early 1990. So, we shall see what impact it will have on housing — surely with the level of sales volumes and increases in median sales prices, we are facing price increases — just do not know how much!

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The Pandemic is leaving its mark on real estate
As the US economy continues to recover from the effects of the pandemic, property owners that weathered the crisis without financial distress are snapping up the limited supply of homes for sale, pushing up prices and further excluding less affluent buyers from homeownership. At the same time, millions who lost income are behind on housing payments and on the brink of eviction or foreclosure.

According to The State of the Nation’s Housing 2021, a new report released this week by the Harvard Joint Center for Housing Studies, a disproportionately large share of at-risk households is those with low incomes and people of color. While policymakers have taken bold steps to prop up consumers and the economy, additional government support will be necessary to ensure that all households benefit from the expanding economy.

Even before the pandemic, household growth in the suburbs and small metros was on the rise. The pandemic helped accelerate this growth, particularly among younger households who were ready to own homes and were looking for more space to work remotely.

In 2020, existing home sales rose 6% and new single-family home sales jumped 20%, putting total home sales at their highest level since 2006. The home buying binge occurred despite a historically tight supply; in late 2020, months of supply for existing homes dipped below two months for the first time ever, while median time on the market hit a record low of 18 days.

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Home improvement boom — it’s here and growing
Home Depot, Lowes, Ace Hardware — these are the new hot retailers today. Why? Because the pandemic created a drive to spruce up our homes and that desire is continuing. Half of U.S. homeowners recently surveyed say they plan to spend more on home improvements in 2021 than they did last year, according to the latest BMO Real Financial Progress Index, a quarterly indicator measuring consumer sentiment about finances.

Renovation projects are expected to continue to rise too. Two-thirds of more than 2,500 U.S. homeowners surveyed said they plan to tackle home improvements this year, the index shows.

Many homeowners are using cash to complete these home renovation projects. 50% of homeowners said they were using cash to pay for these projects, followed by credit cards (24%), line of credit (12%), and loans (12%), the index shows.

Real estate professionals can help as this remodeling wave continues by offering homeowners information into how the renovations, they do can affect their home’s value. For example, kitchen and bathroom renovations tend to offer some of the highest returns on investment. The National Association of Realtors latest report offers some insight: The report showed that there has been a major shift in the housing market since the beginning of the pandemic—record low interest rates, incredible demand, and more people working from home

And what this has produced are home improvements — many on a long-ignored “things to do” list…., homeowners are now stepping up. The top 10 household projects are: painting, bathroom remodels, new flooring, landscaping, kitchen remodels, painted exteriors, smart home devices, new roofs, fencing, and installing a deck or porch. One of the biggest growth areas is the “outdoor kitchen” that expands the home’s living area with outdoor patios complete with the best barbecue, islands, and kitchen equipment available. But they can be pricey — costing as much as $30,000 to $50,000 depending on the size and quality of the barbecue grill, accessories, decking and patio furniture.

Unfortunately, the issues with the supply chain are creating problems. Not only in the delivery of product, but with the cost of the raw materials themselves…

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Drought places added pressure on Southern California
As one stands on the sand at the shores in Santa Monica, looking westward at the magnificent Pacific Ocean, one cannot help remembering that the ancient mariner was right….” water, water everywhere, and not a drop to drink.” Instead, we look eastward for our water.

Precious water resources are literally ‘drying up’ — one only has to take a look at one of the Metropolitan Water District’s pride and joy — Lake Mead and realize we’re in the middle of a serious drought.

After years of an unrelenting drought that has quickly accelerated amid record temperatures and lower snowpack melt, Lake Mead is set to mark another more dire turning point. Next month, the federal government expects to declare its first-ever shortage on the lake, triggering cuts to water delivered to Arizona, Nevada, and Mexico on Jan. 1. If the lake, currently at 1,068 feet, drops 28 more feet by next year, the spigot of water to California will start to tighten in 2023.

The crisis, said Eric Kuhn, former general manager of the Colorado River Conservation District, can no longer be ignored. “According to Merriam-Webster, a drought is a temporary condition,” he said. What is happening, he suggested, is something more permanent and troubling. “This is aridification.”

As fires sweep over large swaths of the West and scorching temperatures fry others, the scarcity of water is a less visible most pressing consequence of climate change confronting the states that depend on Lake Mead.
First to be hit are the areas along the Nevada-Arizona border near Las Vegas, who rely on the lake for tourism, fishing, and recreation. Ramps are closed. Jammed boats are towed from newly shallow waters. Fishermen scour to figure out where to catch striped bass. The iconic lake’s predicament is marked by a “bathtub ring” of calcium deposits that highlight the rocky edge where water once flowed.
We all earnestly hope that rain will fall again, the snowpack will return to normal, and we’ll be free of worrying about water shortages

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Local Issues
We have a few local issues facing us that you should know about:

Mount Saint Mary’s College, now University is working on developing a 35,000 sq ft. wellness center on its campus which is at the top of Bundy Drive. Here are some of the areas of concen.
Lack of fire and evacuation from MSMU during emergencies; Uptick in MSMU related vehicles/cars/deliveries/ onto the small narrow streets; additional commercialization of campus – 24/7 inclusive of summer camps and external events; more than 2,000 MSMU car trips up and down the canyon at peak hours poring onto the canyon streets and Sunset Blvd; over TWO YEARS OF CONSTRUCTION and everything attendant to that… trucks, etc.; additional evening and weekend events and summer camp; the return of wildlife to a quiet campus

They are in the process of holding public meetings and hearings. For more information contact. BundyCanyonInfo@gmail.com. You can also contact LA city – kathleen.king@LACity.org. They ask that you copy the folks at Bundy Canyon on any emails you send to the city.

The other issue is the on-going potential development of the last remaining 445 acres of undeveloped land in the area adjacent to Mountaingate. The potential project is being proposed by Nicklas Berggruen to be called the Berggruen Institute. Mr. Berggruen purchased the property with the agreement that he would develop the formally agreed upon 28 homes, in fact he filed the track map and received approval from the City Council in 2019. Instead, he wants to develop a facility with three buildings. The Mountaingate Open Space Association is perusing legal means to have him uphold the original agreement.

Both of these issues address the same areas of concern. It is incumbent upon and the responsibility of each of us who live or work to work to protect not only our properties and their value, but our natural resources as well.

If you want more information, please do not hesitate to contact me… ceschiffer@gmail.com, 310 442-1384.

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What about your business you might ask?
Frankly, I am busier than I have been in years! Listing and escrow in Mountaingate, and now a passel of buyers who missed that one and are asking me to find more for them, About 4-5 buyers for Canyon homes in Bel Air Crest, and potential listings in Westwood Hills, and Bel Air Park. While I am tired, I really do love all of the activity, so keep it coming!

Looking forward to hearing from and seeing you… Take care

Stay safe, healthy & happy!