Timely Real Estate News………………………………………..20 February 2007

**********************************************************************************************************************************************

House with 23 offers generated 21.3% over listed price

Before we start, I wanted you to know I made a mistake, a “big mistake” in my last SchifferLine (8 Feb 07) — I erred in my ‘story’ about the house that generated multiple offers that was reported to have been listed for $2.875 million. Actually it was listed for $1.875 million. The point of the story was that the house, located on a good street in a good neighborhood in Brentwood, had 23 offers ..a high number in these times it seems. After a one-week escrow, the home’s final sale price was $2.275 million, a 21.3% increase over its listed price. The person who bought the home lives on the same street and purchased the house so he could live there while he remodeled his house. Late breaking news… another house in Westwood, south of Wilshire came on the market last week for $1,195,000 and was sold last night for over $1.5 after garnering 58 offers!!!! The house is decent, but will need some updating and the owners are renting it back from the buyers for 30 days, rent free!!!… Amazing!!!

What does this tell you? People who know their neighborhood, truly understand the value of not only the location, but the value of properties that appear to be under or at least well priced.

What does this tell us?

Within Brentwood — between the listing price perimeters of $2 million and $3 million — there are currently fifteen homes on the market, nine of which that have been on the market since 2006, one being listed since July. What is revealing is that these nine homes have been on the market for a total of 1205 days, or an average of 134 days (more than four months), which we refer to as DOM — Days On Market. In Bel Air, there are 11 houses that have been on the market for an average of 134 days also since 2006. In Beverly Hills, there are six houses that have been on the market since last year for an average of 130 days on market. In all three communities, houses whose prices are not “on the money” are sitting in excess of four months. This situation is certainly not limited to these three areas, but is only being used as examples of what is happening in the market today.

What this tells us that the homeowner and Realtors who priced the homes in Brentwood and Westwood that had multiple offers priced the house to sell to generate multiple offers and sell quickly. Is this a good strategy? Based on the current market conditions — with homes sitting on the market for over four months — the owner’s strategy could be described as risky IF they didn’t get a higher price, however, the final selling price of $2.275 million for the house in Brentwood is what the house should have sold for within that neighborhood. What was realized, as a result of low-priced strategy, was a ‘feeding frenzy’ that moved the house quickly and successfully achieved the ‘right’ selling price.

Is this normal or what?

Everyone is calling this a ‘normal market’ –– meaning that homes are sitting for average of three to four months, even it they are priced right. Houses that are listed and perceived as ‘deals’, like the one mentioned above, are selling very quickly with multiple offers. The point is this: There are two markets — 1) the perceived ‘deal’ or value, which sells very quickly; and 2) those that are priced right but sit for a normal period. Bottom line: How anxious are you to sell your home? Establishing the right selling strategy is what I do…that is where my expertise comes into play for my clients. I do not have a blanket endorsement for purposely under pricing a home to move it quickly. My strategy has always been to price the home correctly in the first place…and if you do, it will sell quicker than homes that are not.

Every house and every transaction is different. It takes someone who knows your neighborhood and who understands your needs to make the right decision.

***********************************************************************************************************************************************

By the way, persistence pays off…..

I am very proud to report that I was selected as one of the Coldwell Banker’s top 1,000 agents for the last quarter of 2006 — out of 64,000 agents nationwide. In a letter from Bruce Zipf, President and CEO of NRT, Inc., the parent company of Coldwell Banker, “….’you had one of the outstanding performances in the nation, and we are proud and honored to work with professionals such as yourself.” Up until the middle of last year, the real estate industry had slowed down — coming off the highs of the early 2000s. As Betty Graham President of the Greater Los Angeles Company said in early 2006, we are entering a ‘normal’ market, which was another way of saying that the real estate business had slowed down. ‘Slowing down’ to a Realtor usually means less sales, less income, but I am happy to say that I stuck to my guns and kept pushing for new business, and I was fortunate in that you all heard what I had to say. And 2007 already is off to a solid start. So, to all of you, thank you so much for your support and your business.

 

 

Timely real estate news……………………………………………. 14 February 2007

*********************************************************************************************************************************************

And you thought the day for multiple offers were over.  Not so. Buyers are hungry.

This week, a four-bedroom Brentwood home with a pool on a big lot South of Sunset, and West of Barrington was listed for $1,875,000 and guess what?  Yup….this listing had 24 offers in three days!  This home, in good shape, was obviously well priced.  Just down the street, another house closed escrow this week, and it, too, sold with multiple offers for $400,000 over asking  late last fall.  While we don’t know the final sales price (not until escrow closes), we can safely assume this week’s transaction fetched more than the listing price….my CB office in Brentwood was abuzz for the day.  We haven’t seen that many offers on a Westside home since the frenzy-feeding days of last spring.

What does this tell us?   1)  There are a lot of buyers out there who understand value.  Value means location, price, quality, functionality, future, and 2) confidence in market and economy.  The market continues to reach new heights, and there is continued, strong confidence in the economy.

The most important fact that events like these tell us is that the perceived value will always drive the demand — if they feel the price is too high, houses will sit.  But if they are appropriately priced, they will generate buyers at your doorstep. 

If a property comes on the market, higher than the buyers think it should be, the first question I get is:  How much flexibility is there in the price….meaning we have a very educated consumer in the market these days.  Buyers are better informed and more diligent in their research…a fact you may not know:  Buyers who their research online before they contact a Realtor see only 6.5 homes before making a purchase…those who shop the traditional way, visit 14 homes before they make a decision.  What this tells you is that generally buyers are smarter and know what they want before they enter the marketplace.

**********************************************************************************************************************************************
Mortgage rates rose .125% last week, but held steady this week after strong economic news.  What does this tell us?  Regardless of minor increases in mortgage rates (that are still low compared to history), buyers are going to find a way to purchase the home of their dreams. 

**********************************************************************************************************************************************

 Notices of Default (the first step in the road to foreclosures) and foreclosures are up.  What does this tell us?  Negative amortization and interest-only loans haven’t panned out in areas where there is little or no appreciation in property values….hence, no equity.  There have been few foreclosures on the Westside, and there may be some more, but with interest rates as low as they are, most homeowners facing foreclosure can re-finance and save their home. So what that tells us is that the owner is probably unrealistic in their asking price if they are trying to sell the house, the bank doesn’t want to work with them, and may be unrealistic as well.  Contrary to public perception, foreclosures are not always the bargain they seem to be. You will really need to know what you are doing, and have an agent who is experienced in buying foreclosures.  I know I have bought and sold a few in my day, including some for myself!   

***********************************************************************************************************************************************

What are the latest MLS numbers telling us for Brentwood, Bel Air and Beverly Hills?  In summary, there is good news for Bel Air compared to January 2006 —median sales prices went up 6% for last month….Beverly Hills was down 9% and Brentwood down 2.%% compared to the same time period.  Overall, price appreciation is holding steady in all three of these areas — Brentwood and Beverly Hills were up last year over 2005 at this time (around 5%) while Bel Air was down 17%….so overall, the market is back to normal, and price appreciation remains strong.

***********************************************************************************************************************************************
The Glass Finally Arrives….
The anticipation was killing me for the past week — the glass sculpture I purchased from one of Europe’s foremost artists, Ales Vasicek, was due to arrive on Friday.  This magnificent glass work, which measures 45 inches wide by 18 inches high, immediately caught my eye when I entered his studio in Prague last October.  I had to have it and decided to buy it on the spot.  Only after agreeing to the purchase it did I hear the artist’s name for this smoky, grey-colored sculpture — “Smog”.  Given where this beautiful sculpture was going to have its final resting place — here in the heart of Los Angeles — I thought the name was most appropriate.  We all had a chuckle, and frankly, now that it sits here on its pedestal in my dining room, I only think of how beautiful Prague is and what wonderful memories I have from my trip last fall.  Happy glass hunting….off to plan my next adventure!

 

 

 

Timely real estate news………………………………………..,,, 18  January  2007

There is some really good news and some really bad news already in 2007. 
The bubble is still here if you own property in San Diego, Las Vegas, or Miami — where homes have been languishing on the market for six months or longer.  No one has to tell you about the ups & downs of the real estate, yet if you’re reading a daily newspaper over the breakfast table in Bel Air, Brentwood, or Beverly
Hills, you are counting your blessings:  There’s lot’s of talk in the media about many areas in the US that are seeing sustained price devaluations but there also are some very healthy markets — in Boston, New York, San Francisco, Los Angeles, and Seattle:  Each are enjoying an annual appreciation that outpaces the national average by at least 30% according to Business 2.0 magazine.

As you know, I was in Cabo over the holidays, amazed to see prices zooming through the tile roofs along Baja’s incredible real estate market.And that’s not all.  My long-time marketing consultant travels to some of the hottest real estate markets on the Planet and reports back that home prices are soaring also in exotic locales like Antalya, Turkey and Marrakech, Morocco.  “Second homes are selling for 800,000 Euros on lush golf courses in Marrakech,” Bob Liljenwall says.  “Spain is going over the $1 million level everywhere, so the Brits and Europeans are moving south and into booming beachfront locales.”

But what about here…in our neighborhood?  Prices continue to hold their appreciation over the past year. Inventory has increased, and the price increases werelower than in years past, but up none the less.  of 3.7% over the previous year,one has to count their lucky stars here at home.

Location, location, location has always been the primary measurement for retaining home values…but as we have seen since we have returned to a ‘normal real estate market’ (thank goodness), price has continued to be the key indicator for how long homes last on the market.  And price has more to do with economic conditions in the real estate market — over supply of new homes (like in Vegas, San Diego, and Miami), but there are also key points to look at, too.

Here are just a couple of indicators I follow that might help you in terms of measuring future residential real estate investments:

Income and job growth — these two are linked, of course, especially when you consider that prices will maintain their appreciation upward trends if there is competition for higher-end homes.  When there is a strong job market, there is economic growth, and families want to (and do) move up to bigger
and pricier homes.  Likewise, where there are new companies moving into the market, they trigger home building and demand for homes in the ‘best/better’ neighborhoods, which provides the continuing price appreciation, as we have found on the Westside.

But what we enjoy here on the Westside, of course, are our inherent attributes — great weather, strong business growth in a variety of industries, and great community assets.  No market is bubble proof…but
when you are looking beyond the steady performance of Bel Air, Brentwood, and Beverly Hills (as well as other strong communities such as Pacific Palisades and Santa Monica), don’t assume that bubble can’t burst.  Just ask new condo owners in San Diego, Las Vegas and Miami.  A word to the wise….

Here’s to a wonderful, healthy and happy New Year for all of us.