Timely Real Estate News………………………………….. 15 December 2019
Sales volume continues upward trend
After months of staying behind last year’s sales performance, we are now seeing our fifth consecutive month of increases in sales volumes in the communities of Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City and Brentwood. Overall sales volume for these five communities is $3.624 billion, 10.1% ahead of where we were last year at this time at $3.290 billion.
Leading the sales push is Beverly Hills, which achieved more than $180 million more in sales through the first 11 months of this year than 2018 for a total of $980 million, and Bel-Air/Holmby Hills, which was $305 million above 2018 numbers, stands at $937 million through November. 
There were notable large sales of $11 million and $15 million in Beverly Hills…Beverly Hills Post Office recorded a $22.5 million sale, and Brentwood had a $16 million sale. The average Days on Market was a respectable 67 days in these five communities, with only Beverly Hills Post Office going below 90% of “sales price to listing price” at 82%, which is abnormal for BHPO.
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Median sales prices remain a ‘mixed bag’….
Through the first 11 months of 2019, median sales prices continue to fluctuate — two of the communities I work in were up — Beverly Hills was up 4% for the year at $6.212 million and BHPO was up 3% at $2.863 million. Bel-Air/Holmby Hills was down 17% to $2.250 million (The sale of Chartwell (the Beverly Hills Hillbilly Mansion) for close to $150,000,000 will obviously impact the December stats for Bel Air!)., Westwood/Century City was also down — 12% at $2.192 million. Brentwood was flat — even with last year at this time — $3.212 million. Culver City, another market I cover, had 13 sales last month, and the median sales price has risen to $1.360 million. This is one of the most affordable communities on our Westside. Let me help you discover this jewel of a market. The development of this community has been exciting to watch and be a part of.
In comparing where we are in November 2019 vs. 2018, we’re holding our own in terms of prices and volumes. Demand is still high, and inventory remains tepid. We could use more inventory for sure, and frankly, the holidays are a great time to get into the market — less competition for well-priced homes, and sellers are more anxious to deal now rather than waiting for the traditional spring selling season when competition heats up. Interest rates are terrifically low right now…and as you’ll read later, no one is expecting a recession in 2020 per the Federal Reserve. So, it’s a safe bet to enter the market before the end of the year…it’s always been one of my best months.
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Fed changes will remain constant for a year
Some good news: After three successive interest rate cuts meant to head off a global economic slowdown and trade worries, the Federal Reserve hit the pause button at its last meeting of the year last week and signaled it was likely to remain on the sidelines next year.
The decision to keep the Fed’s benchmark rate at 1.5% to 1.75% was approved unanimously by all 10 voting members, whereas two or three had dissented in previous meetings. In their new rate 
projections, 13 of 17 policymakers expect the Fed’s key interest rate to remain unchanged through next year. None see further cuts, while four predicted a single quarter-point rate increase in 2020.
Last week’s decision was widely expected and marked a quiet end to a busy year, but the central bank is looking at a potential minefield during the 2020 presidential election year. Although the U.S. economy remains defiantly buoyant today, particularly the solid job market, there are signs that next year could be different. Among them: the sagging European economy with Britain’s potential exit from the EU, and the pending tariff negotiations with China, which signaled an optimistic note last Friday.
Also, the current good times, which began with recovery from the Great Recession in 2009, are long in the tooth, in the view of some economists. For most, the only questions about a slowdown are when it will come and how severe it will be.
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No surprise…inventory dives, demand soars
Let the good times roll…works in music, but not always in real estate. In fact, with continued low-interest rates stimulating buyers to enter the market now, the effect is that there’s an increased influx of buyers causing a shortage of available houses in the market. Blame it on good times.
Inventory levels declined 9.5% year-over-year in November as low mortgage rates push more buyers to the market. Increased buyer demand spurred by low mortgage rates caused inventory levels to plummet 9.5% year-over-year in November, according to realtor.com last week.
The 9. % drop translates into 131,000 fewer listings on the market compared to 2018, with entry-level homes priced below $200,000 experiencing the largest annual decline of any price tier (-16.5%). The number of new homes hitting the market declined 7.7% over the same time period, further exacerbating the shortage
As millennials — the largest collection of buyers in U.S. history — embrace homeownership but are being challenged by the low inventory and lack of affordable homes and many are giving up trying to enter the market because of this. Low mortgage rates combined with increased demand is outstripping supply, causing inventory to vanish.
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Making your home sustainable…it’s really the “in” thing.
You can’t escape the latest rage in housing — tiny homes…or living off the grid or both…and all these trendy escapes from civilization press forward with one main theme: Sustainability…regardless of where. Saving the Planet’s resources.
Sustainable features are the latest trend to attract buyers. Houses marketed with electric charging stations, and kitchen countertops made from locally quarried stone are what makes today’s home 
shoppers swoon.
According to the National Association of Realtors Sustainability Resource Guide, 61% of surveyed members said their clients are interested in sustainability and want more of these features in their homes—and it’s not just millennials requesting them. Almost every age group wants to save money, pare energy, water consumption, and remove toxins from the air they breathe. Reducing utility bills is often the driver, but many also want to do the right thing.
Here a few key tactics in attaining sustainability — Downsizing to what you really need, think smaller house footprint. Embodied energy — the combined use of energy consumed by all the processes associated with the production of a building — look for builders who understand this term and concept. Insulation and heating — this is a must and easiest to achieve. Landscaping and water use — much like what we are already doing now in Southern California’s semi-arid climate. Solar panels are hugely popular for their efficiency in our area, plus you can earn tax credits of 30% in 2019, 26% in 2020, and 22% in 2021, and 10% in 2022.
There are many more sustainable projects one can do to improve your home and its impact on the environment. We’ll be covering these in future editions of The Schiffer Line.
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It’s not nice to cancel homeowner’s insurance in fire areas
Responding to several years of unprecedented fires across California, regulators last week imposed a one-year moratorium banning insurers from dropping policies for homeowners in wildfire-ravaged areas of the state. In many cases, these insurers have not only dropped the fire insurance for their clients, but have cancelled all their policies, including auto and umbrella.
The move comes amid an exodus of insurers in communities hard hit by fires, forcing some homeowners to take plans that provide less coverage, always at higher premiums. Some have had to go without insurance altogether. “I have heard the same story again and again. People getting dropped by their insurance carrier after decades of coverage,” California Insurance Commissioner Ricardo Lara said. “To add insult to injury, many struggle to find coverage.”
Though existing law prohibits insurers from dropping policies for homeowners who have suffered a total loss in a wildfire, the moratorium relies on a law that went into effect this year that extends that rule to homeowners who live adjacent to a declared wildfire emergency and did not lose their home.
Lara further stated the moratorium will give both homeowners and insurers time to reassess a path forward for living with wildfires.
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Millennials…rent forever? Many think so
What is it with these millennials? Born between 1981 and 1996, a new study provides the first hard evidence that large numbers of millennials who would like to become homeowners are so frustrated that they have changed their minds, at least for now.
Millennials are frustrated. Over the past year, more than a 1 million additional millennials gave up on planning to buy a home and resigned themselves to renting for the foreseeable future, and perhaps the rest of their lives.
The survey, by the Apartment List website, found that 12.3% of millennials plan to rent for the foreseeable future, up from 10.7% just one year ago.
The study defines millennials as those between the ages of 23 to 38. Depending on which age brackets demographers use, the number of millennials in the United States hovers around 80 million.
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Celebrating the holidays
How are you celebrating the holidays? The party circuit is in full swing as well as the shopping and gift wrapping which means we are all very busy. With Thanksgiving having been a little late this 
year, and Chanukah on the 22nd of Dec, Christmas the 25th and Kwanza the 26th, it makes ones’ head spin with all the celebrations.
As some of you may know, I am a mentor in real estate and have been for a number of years. I am very proud to say that a number of the top producers in my office started their careers under my tutelage. Each year I host a party for the mentees, past and present. We had the party this week and there were 17 of us, a lot of fun and laughs including the gift exchange called White Elephant, particularly my gift choice of an “Ugly Christmas Sweater”.
My family is coming here from Vancouver BC & Montreal for the holidays and we are all looking forward to fun celebrations particularly with my 97 year old Mom. I am looking forward to our celebrations including wearing fun, crazy hats and playing the Karaoke machine!
Please don’t forget my Warm Coat Campaign. If you have any warm clothing that you and your family are not using, please let me know and I will be more than happy to come by and collect it and give it a homeless shelter. Just give me call at 310 442-1384.
Have a wonderful Holiday!!!
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at carole@caroleschiffer.com www.caroleschiffer.com
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Although all of these homes will be hitting the market, they will be located in areas where most of the younger generations don’t want to live. The areas that will be impacted the most are traditional retirement communities, including California, Florida and Arizona. However, the areas that will be least affected are vibrant, affordable cities, including Dallas, Houston, and Atlanta.
In areas like Los Angeles, where the median home value is 115 % of the new baseline loan limit the conforming limit is higher than that baseline but cannot exceed 150 % of it. That calculation caps the loan limit for these “high cost” areas at $765,600, or 150 % of $510,400. The high cost limit this year is $726,525.
Builders are responding by adding two master suites into more floor plans, whether it’s a single-family home or condo. K. Hovnanian Homes offers several townhouse communities with two master bedrooms. The rooms include large ensuite bathrooms and walk-in closets.
and hopefully make these people’s lives a little more comfortable. If you have any extra coats or jackets that you can spare, please contact me at 310 442-1384 or ceschiffer@gmail.com and I will come by and pick them up and deliver them to The People Concern (formerly known as OPCC & Landmark) in Santa Monica. I will be collecting these items until the end of February.
Mine was quiet and somewhat uneventful. Rather than making a whole bird for just the three of us, I decided to make “parts” (wings, thigs and legs), and it was a huge success. We were still able to express our gratitude and thanks for all the wonderful things we have in our lives. I had just come off spending almost 2 weeks of taking care of Mom 24/7 while her primary care giver was on holiday in Spain. I cannot deny it was hard work to deal with someone with dementia and all of its attendant problems, but it also gave me a true appreciation for all of the caregivers in the world plus the added joy of spending the extra time with my Mom!
As for business, it continues to move on. Buyers are still looking to find that special home and wondering about timing.
up 3% for the year, but Bel-Air/Holmby Hills, which scorched October sales, was down 16% for the year. Beverly Hills PO was up 6% but Westwood/Century City was down 3%. Steady Brentwood was up 5%, is now at $3.262 million, its highest ever. Pacific Palisades median sales price for October was $2.808 million.
Yun pointed out that compared to a year ago, the economy is on firmer footing, and the outlook for residential real estate is improving….“a year ago, conditions were soft, mortgage rates were close to 5%, and consumers were backing off. But when housing is positive, the economy doesn’t go into a recession. There will be no recession if there is no major trade war.”
Through his butterfly treks across the state, he didn’t notice it at first, but in 1999, 27 years after monitoring his sites, something strange happened: the populations of 17 species of butterflies at his low-elevation sites tumbled all at once. What he and his colleagues found is the number of butterflies had decreased significantly. He stated that 2018 was the worst butterfly season he ever experienced. The number of species across all elevations was down, something he had never seen before.
had gotten used to hearing the sound of them during the night, but with them being so low at 1:30 am as to wake me up and looking out my windows and seeing the plumes of smoke and flames again in our back yard, my first thought was “Oh No, Not Again”. Fortunately, the winds were going against Bel Air Crest, so as long as they stayed in that direction, at least we were safe. By the way, check out, Windy.com which is a great site, you can dial it down directly over your street and not only see where the winds are, but where they are predicted to go and when. It took me a bit to get settled again, particularly as one of my longtime friends in my office lost her home, car, EVERYTHING in the fire.
Fed officials have described the rate cut as essentially an insurance against the risks to the American economy from the U.S.-China trade war and weakening global growth, which are threatening to undercut what since the summer has been the longest economic expansion in U.S. history.
reports that have Millennials in the high-end market for their homes.
The Pending Sales Index is an indicator based on contract signings, rose 1.5% to 108.7 in September. Year-over-year contract signings jumped 3.9%. An index of 100 is equal to the level of contract activity in 2001.
In a recent story in the LA Times, it was noted that not long ago, these byproducts of a throwaway lifestyle found a market in China, allowing Americans to toss their garbage in recycling bins with a seemingly clean conscience. But in late 2017, China imposed a stringent ban on imports of certain scrap papers and plastics, creating a glut of material and roiling the global recycling industry.
One of those days I had to drive through one of the side Canyons to get from BAC to Santa Monica and that ride took 3 hours, and in the course of that ride while I was sitting in my car I was shocked to see the amount of city owned and privately owned vegetation wrapped around power lines just waiting to go up in flames. It was and is a disaster waiting to happen!
Communities on the Westside continue to struggle in the high-end market segment. The number of closed sales is still below last year. There have been 434 closed sales of $5 million plus this year versus 477 currently last year, down 9%. Of these, 125 were $10 million-plus and there were 134 $10 million-plus closed sales at this time last year, down 7%.
For example, Beverly Hills median sales prices through September were 1% ahead of 2018 at $6.200 million; Beverly Hills Post Office was plus 6% at $2.835 million. Bel-Air/Holmby Hills was down 3% at $2.200 million; Westwood/Century City was down 4% at $2.167 million compared to 2018; and Brentwood was down 5% at $2.750 million vs. 2018. Santa Monica was down 7% at $2.750 million. Again, we tend to experience month-to-month fluctuations as well.
Nationwide, properties were typically on the market for 31 days in August. Forty-nine % of homes sold in August were on the market for less than a month, according to NAR’s existing-home sales report. The NAR survey also reported low inventory and interest rates as the main issues that were facing transactions in August. “As expected, buyers are finding it hard to resist the current rates,” NAR Chief Economist Lawrence Yun says about recent strength in existing-home sales. “The desire to take advantage of these promising conditions is leading more buyers to the market.”
National spending on home remodeling has jumped 31% to $448 billion since 2013, according to the Harvard Joint Center for Housing Studies. All of the homeowners interviewed said they felt that living in their projects not only saved the cost and hassle of moving, it helped avert design or engineering snafus and increased communication.
process is amazing and remarkedly easy, and one I would highly recommend as a possible choice of avoiding knee replacement. If you have any questions, please ask me. I am a huge fan of the process. The only negative is that at this time, it is not recognized by the government as it is considered experimental, so there is no insurance coverage. They are working toward changing it, but for now, that is what the situation is.
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