Timely Real Estate News………………….. 15 March 2018

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Happy St. Patrick’s Day….

Everybody is Irish on St. Patrick’s Day.   The “Wearing’ of the green” is a must…and there is the traditional corned beef and cabbage….and green beer, although that’s not what the Irish enjoy back home.  Founded in Boston in 1737. St. Patrick’s Day could be your lucky day!!

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Sales moderate, volume moves up a notch

Real estate sales in the five communities I report on fell by 1% for the month of February, which was a positive sign as we were running nearly 5% behind our sales performance a year ago at the end of January.  

Sales volume for Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood was down 1% at $451 million for 2018 vs. $457 million through two months of 2017.  What we’re seeing is the impact of the lack of inventory in our market and across Southern California and elsewhere.  And while we are almost even with last year, we expect the trend for moderate sales growth to continue for the balance of the year. Spring selling season has already started and there is brisk activity at open houses.  Count on multiple offers for homes that are competitively priced.  

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A mixed bag on prices

Median sales prices are a mixed bag as well.  While median sales prices are zooming up across the country, we are encountering mixed results within these five communities — Beverly Hills’s median sales prices through the first two months is up 8%  to a robust $7.224 million.  Bel-Air/Holmby Hills is up 91% above last year at $3.695 million. and Westwood/Century City was up 20% at $2.315 million.   However, Brentwood is down 31% as of end of February at $2.920 million and Beverly Hills Post Office is down 10% at $2.557 million.  

One of my favorite communities — Pacific Palisades, had sales of $58 million through February, down 64% from a year ago…and its median sales price was down 4% to $2.970 million.  

Median sales prices and how they work….

There is a lot of ups/downs within the market now because of inventory challenges, but I want to share with you what is happening, especially on median sales prices.  Median sales prices are not an “average” — it reflects the “middle price” of the number of sales where half the homes are above that price and half are below….it doesn’t take into consideration whether the top home sells for $100 million or the bottom home sells for $500,000…only the middle price is used. 

For example, it can get confusing, especially when looking at the median sales price for Beverly Hills in February, which was $2.970 million, down 55% from a year ago.   The median price in BH for February 2017 was over $6.700 million.  Yet the median sales price through February 2018 is $7.234 million because that was smack in the middle of the homes sold that month.  As a reader of the SchifferLine, you’ve seen how prices fluctuate from month to month — but again, the key statistic to watch is “year-to-date” median sales prices…that gives you a clearer picture of the important trend for the year.

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February’s job growth takes economy to new levels….

The “blockbuster” gains of 313,000 jobs in February are going to have a strong, positive impact on all sectors of the economy.  It’s predicted that unemployment is going to run into the ’threes’ and wage growth is going to accelerate, it is just a matter of time according to Mark Zandi, chief economist at Moody’s Analytics.  He indicated that “the labor force increased to 806,000 in February which means that it is now reaching everybody…including people on the fringe.”  

Guy Berger, chief economist at LinkedIn, said the fact that these gains took place even with the headwind of retiring Baby Boomers departing the workforce was all the more remarkable.  And it was also noted that a greater supply of workers is going to pull down pricing, and that wage growth is now in a more manageable area of 2.6% growth that will stem inflation fears, which would cause higher mortgage rates.  All of these numbers augurs well for our housing industry…more employment, more seeking to upgrade their housing situation.  

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Would driverless cars affect real estate values?  Yes.

Imagine that!  The mass adoption of driver less cars could shift some of the traditional rules that govern real estate values, particularly those concerning access to mass transit.

Following state approval, fully driverless cars are heading to California’s streets in April, so that change is a lot closer than we might have expected. According to a Forbes report, having a driverless option could make using — and living and working near — mass transit less appealing to those with access to the technology and the means to afford it,

Driverless buses and smaller shuttles could make it easier for people to get to less transit-heavy areas as well, potentially boosting the property values there and encouraging development. And driverless cars that can drop passengers off and head elsewhere could also reduce the need for on-site parking and developers’ requirement and expense to provide it. That means that space can be allotted for more profitable uses, like retail or residential space.  Welcome to an accelerated space age (the Jetson’s here we are!).

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Pacific Palisades welcomes Rick Caruso, Jeff Bezos….

The “sleepy, sometime neglected town center” in the middle of one of Los Angeles’s wealthiest residential areas, it’s now getting a “make over” by two of America’s most dynamic make over artists named Rick Caruso and Jeff Bezos. 

Caruso, who created the Grove and Americana at Brand, envisions a $200-million redevelopment known as Palisades Village as more of a walk able Main Street than a large, shopping center like his other two developments. The 125,000-square-foot complex on Swarthmore Avenue bordering Sunset Boulevard will include a movie theater, community space, grocer and retail shops. There will also be eight apartment units. 

While the new development will replace beloved Village Books, a long-standing favorite hangout for book lovers including Tom Hanks, it will feature Amazon Books that is already in New York City and Los Angeles…this is a bit of Deja vu for the movie “You’ve Got Mail” starring Tom Hanks).  The good news is that there will seven restaurants and bars in the Village.  This will be a true, upgraded and contemporary town center.  

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Fires took their home…what now?  Replace it or…?

After losing more than 6,000 homes in the devastating Tubbs Fire in October of last year, Santa Rosa residents have now to determine whether to stay and rebuild, or move on?  The challenge with the former is that while their property remains, the devastation surrounding their community has not been removed…many lots have yet to be cleared, and the prospect of rebuilding in a once lush neighborhood that is now home to blacked trees and landscape is too much for many. 

But there are many, too, who have decided they’re not going to abandon their homesite or community — they’re going to rebuild, even facing the continued challenges of getting their insurance straightened out and finding a solution for replacing their homes.  

Many have turned to a somewhat simpler method — manufactured housing or pre-fabricated homes.  They’re finding that manufactured homes these days are not like the old- fashioned ones — these are attractive, well-designed and engineered ‘real homes.  They feature every luxury and amenity a “stick-built” home offers. And they’re well-built in every detail.

“Most of the people we know are going with a pre-fab,” said a homeowner.  “It just makes sense.”  The selection of homes is broad for every size, budget, and feature.  They can be put on their lot in a matter of weeks, not months.  The costs are dramatically lower, while still getting the quality they would get in a “stick-built” home. The designs have become so modernized that one can’t tell whether it’s a manufactured home or “stick-built”.  Still…the tasks of rebuilding their home — and more importantly, their community in the Santa Rosa area remains daunting.  We wish them luck!

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Real Estate in my office at Coldwell Banker in Brentwood

Life is very interesting in my office currently.  There are some agents in the office that are very busy, and others not so much.  For those of us who are very busy, myself included it seems that it is pretty much the same as it has been for a while.  I have multiple buyers all basically wanting the same thing and being surprised to find the size of the groups at the open houses they are attending or the sales prices of properties that they are interested in, but feel the price is too high, and /or don’t want to get involved in a multiple offer situation. They appear to be waiting for the “other shoe to drop” and continue to be surprised when it doesn’t.  When the property they are interested in sells and then sets “the new bar” for the price of that home, they are sorry they did not enter into the fray. This happens a lot.

Currently I have a lovely home available for lease in Bel Air.  We are asking $11,750 for this 5 bedroom/5.5 bath home with a wonderful resort like back yard, large open spaces and is GREAT for entertaining. The tenant is moving out the end of the month, and after a brief cleanup will be ready for the new tenant.  I have some other properties coming up soon as well, both sales and leases, so please let me know how I can assist you with any of your real estate needs.

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Happy Passover and/or Easter

In a few weeks, we have a double celebration with both Passover and Easter falling on the same weekend this year.  I hope however you celebrate being enjoying your Matzo or holiday ham, or perhaps both, you have a wonderful time with your family & friends. Enjoy

Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office 310-442-1384 (office) or e-mail me at carole@caroleschiffer.com  www.caroleschiffer.com

CalBRE  00677619 ©©2018 Coldwell Banker Real Estate LLC.  Coldwell Banker is a registered trademark licensed to Coldwell Banker Real Estate LLC 234567An Equal Opportunity Company.  Equal Housing Opportunity.  Owned and Operated by NRT LLC.  Coldwell Banker does not guarantee the accuracy of square footage, lot size or other information concerning the condition or features of property provided by the seller or obtained from public records or other sources, and the buyer is advised to independently verify the accuracy of that information through personal inspection and with appropriate professionals

The SchifferLine

Timely Real Estate News…………….. I March 2018

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When you’re hot, you’re hot… market sizzles

Surely, it’s not the weather getting hotter, though with the crazy weather we have perhaps it is, but perhaps, it is the real estate market.!  Home prices in Southern California had another ’sizzling’ month as prices jumped 11.4% in January, the largest year-over-year gain in 44 months as the region’s already ‘hot’ housing market got even hotter. The double-digit rise in the median price put it at $507,000, which was lower than December’s peak of $509,500 when the six-county region surpassed bubble-era highs of $505,000 in 2007, according to a report out Tuesday by research firm CoreLogic, San Diego. 

If you’ve been reading the Schiffer Line for the past year, this is not a surprise as I have been writing about the continued monthly price increases which are not necessarily great news for those looking for housing.  

The one-month reduction in December in the median price isn’t expected to spark a trend. Adjusted for inflation, the region’s median is still nearly 13% below the 2007 peak.  Home prices have been rising each month on a year-over-year basis for more than five years. In addition to an improving economy, low mortgage rates have lifted the market and enabled borrowers to pay more for a house, as long as they can come up with their down payment and qualify for the loan which is a process that has gotten easier lately.

Riverside and San Bernardino counties — the region’s most affordable areas — represented a larger share of all activity in January compared to a year ago, which put downward pressure on the regional median price.  New home sales in the region were up 26% year-over-year, but overall sales, including resale homes and condominiums, were down a slight 1.5%.

Absentee buyers, mostly investors and vacation-home buyers, bought 24.5% of all homes sold in January, said Andrew LePage, research analyst with CoreLogic. That was up from 23.1% in December and up from 22.5% in January 2017. High rents in Southern California are motivating investors who want to acquire houses and lease them to tenants as well. 

While prices are up, housing unit sales declined

That’s why prices are up because of the scarcity of housing across the board — everywhere, not just in Southern California.  According to the National Association of Realtors, January existing-home sales dropped 3.2%, the largest decline since 2014, as continued inventory shortages are to blame for the two-month slump.  

Existing home sales decreased 3.2% to a seasonally adjusted annual rate (SAAR) of 5.38 million in January — dipping from a downwardly revised 5.56 million in December 2017.

This month’s sales pace is 4.8% below January 2017 and is the largest annual decline since August 2014 (5.5%) and the slowest pace since September 2017 (5.37 million). Unsold inventory is at a 3,4-month supply…which is low. “With rising wages and a strong economy, demand is high,” said Lawrence Yun, chief economist for the NAR, “but the dangerously low supply is hampering the sales pace (units) once again.”

On the California front, as I related in my last Schiffer Line, we need a minimum of 186,000 housing units each year to handle the increase in population, and yet, we only can deliver 100,000 units…which causes California serious shortages.

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High-end sales down in West Los Angeles

Last year was a ‘booming’ market for high-end sales for the West Los Angeles market.  However, in looking at the report from January 2018, which reflects sales made the end of last year, the sales volume sales is down.  There have been 59 closed escrows of $5 million-plus homes this year, versus 61 at this time last year.  Of these sales, 15 were $10 million-plus, versus 27 a year ago, down 47%. Only four of these sales were $20 million-plus homes versus 13 in last year (down 69$).

The four buyers of the $20-million homes were three Americans, one Canadian, and the areas in which the homes were located were two in Malibu, one each in Bel-Air and Brentwood.

The good news is that there are 52 pending sales of $5 million-plus homes and 16 of these are in the $10 million-plus range.  Only one is in the $20 million-plus area.

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“Must do’s” before you list your home

Terrific news:  You have decided to list your home…so now what?  Well, the fun is just beginning.  Here are some handy hints I will share with you before I put that For Sale sign on your front lawn:  

All of these “must do’s” may sound elementary – -and they are, but many homeowners really overlook these very simple tasks that can affect the successful sale of your home…1)  Make sure the doorbell rings…2)  Service your heating and cooling system – make sure it’s working before you have an open house…3)  Check all the light bulbs…4)  Check the smoke detectors…5)  Deep clean and de-clutter — everywhere…inside and out..6)  Clear out the garage (generally the men like to inspect the garages!), 7) touch up surfaces — repaint and/or clean all of your flat surfaces.  

Yes, I know this is really Selling House 101…but you would be surprised at how many homeowners forget to take care of the basics…and you can do most of these simple chores yourself.  

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Where is everyone going?  “Hot markets” are waiting 

Because millennials, Generation Xers, and baby boomers are in different stages of their lives, they are seeking different types of real estate markets that meet their specific needs. 

The National Association of Realtors found the hottest locations for each age bracket is based on migration data for each of the major U.S. metros, home-search activity, and the percentage of positive change in home ownership for each city from 2016 to 2018. 

The research shows that millennials are lured to places with strong technology and cultural centers, Gen Xers favor more affordable markets, and baby boomers are heading to the Sun Belt.

Top markets for Millennials are seeking booming job markets — starting with San Francisco, Seattle, Houston, Dallas and Washington D.C.  (no Southern California location made the top eight.)  Generation X is looking for housing affordability where they can meet the needs of a growing family — Houston, Miami, Dallas, Washington D.C. and Riverside — the top 5.  

What do Baby Boomers want?  They’re looking to downsize and are looking for homes that require little maintenance and perhaps located in a 55-plus community.  Their top 5 include Phoenix, North Port, FL, Miami, The Villages, FL, and Austin.  Riverside is ranked No. 7.  

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Despite market swings….” we have a strong economy…”

New Federal Reserve Chair Jerome Powell stated that the central bank can stay its current course of gradual rate increases in light of a positive forecast for economic growth…and that’s good news to hear.  

 “Some of the headwinds the economy faced in previous years have turned into tailwinds…” was his message before the House Financial Services committee this week.  He received high marks for his first presentation, although rate hikes are a certainty for the balance of the year.

The Fed chief downplayed the recent stock market correction and the concern that rising interest rates would hinder growth.  “We do not see these developments as weighing heavily on the outlook…for the economy,” he stated.

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Do pets have a vote?  Some think so….

A home buyer recently called her agent and asked if her dog could see the condominium…the home buyer had already seen the house and was on the verge of making an offer.  However, she apparently wanted a second opinion — the lady and the dog arrive…and the dog is paraded around from room to room — wagging his tail while inspecting the nooks, grannies and floors.  “OK…looks like we have a win-win here…” She bought the condo…the dog apparently approved.

Are pets that important?  A national survey found that 89% of pet owners would walk away from a home purchase if the property had restrictions against pets, while 61% would not buy a home or have it altered if they believed that it was not a pet-friendly environment.  

It is no secret that millennials love dogs and research found that a third of millennials who had already purchased their first home said they were influenced by the need to have a space for a dog.  After all, they’re a member of the family, too. 

I personally miss having a dog, but with my busy schedule and the concern about the critters living in the hills also, I just have to enjoy my friends and client’s dogs

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My Life

First of all, thank you to everyone who expressed concern about my lovely cute Mother who unfortunately fell and hit her head and had a brain bleed.  We call her Teflon Kelly!  She spent a little time in Neuro ICU, and is now home and doing well. 

I missed seeing everyone at the 25^th Anniversary Brunch for our wonderful Bel Air Crest Property Mangers Fiona & Rick Cole.  I understand it was a lovely party. Sorry to have missed it.

Work wise, I am very busy. Trying to find properties for my varied clients and buyers/tenants for my lease listings.  I am looking for a 20,000 minimum FLAT lot (or a house on a qualifying lot) in a gated community for a specific client.  Please contact me if you know of one. Also, I have a fabulous home on Thurston in Bel Air coming up for lease the end of March.  I will have photos on my web site the first of next week. We are asking $11,750. And the house is really great!

Please let me know how I might assist you or someone you know with your real estate needs.

Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office
310-442-1384 (office) or e-mail me at carole@caroleschiffer.com  www.caroleschiffer.com

CalBRE  00677619 ©©2018 Coldwell Banker Real Estate LLC.  Coldwell Banker is a registered trademark licensed to Coldwell Banker Real Estate LLC 234567An Equal Opportunity Company.  Equal Housing Opportunity.  Owned and Operated by NRT LLC.  Coldwell Banker does not guarantee the accuracy of square footage, lot size or other information concerning the condition or features of property provided by the seller or obtained from public records or other sources, and the buyer is advised to independently verify the accuracy of that information through personal inspection and with appropriate professionals