Timely Real Estate News……………………………15 March 2016

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Wear ‘the green’ for good luck. Everyone’s Irish on St. Patrick’s Day, March 17

 

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In the real estate world, it’s all relative….sales still up

Buffeted by a slowing economy in the fourth quarter, where the GDP just reached 1%, the real estate market is at least making some headway. Not a lot, mind you, but enough to show that the five communities I report on each month are moving in a positive direction — as of February 2016 sales volume was 2.9% ahead of where we were last year.

Sales volume for Beverly Hills, Beverly Hills Post Office, Bel-Air, Westwood/Century City, and Brentwood was $386 million vs. $375 million a year ago. But two years ago, we were at $405 million for the first two months of the year, meaning that we are trending “flat” in terms of overall sales activity. Why? Lack of inventory is the big reason, of course, which means that lower unit sales are offset by higher prices. And the sales volumes in each community can vary greatly between one year and the next and even between one month and the next. For example, for the first two months of this year, BHPO volume was up over $27 million compared to a year ago, while Bel-Air was down $35 million.

Pacific Palisades’ volume was up 25% for the first two months of this year at $109 million, which is not included in the above totals.

One of the key indicators

Of course, is year-to-date Median Sales Prices, which have always provided the better measurement of how we are doing. Beverly Hills and Beverly Hills Post Office are showing strength again. Beverly Hills’s median sales price is up 30% at $4.830 million….for the two months of this year compared to a year ago of $3.700 million. BHPO is up to $3.395 million or up 58% for the same period. Westwood/Century City is up 2%, but Bel-Air is down 2% and Brentwood is down 8%. Pacific Palisades remains even with last year’s median sale price at $2.700 million (year-to-date).

Comparing this February to February 2015….

Beverly Hills median sales prices grew significantly from $3.955 million to $6.825 million, a 72% increase….and BHPO went from $2.000 million to $2.795 million, a 39% increase. Bel-Air was up 7%, Westwood/Century City was up 14%. Brentwood was down 3% and Pacific Palisades was down 11%. As you can see there is a lot of fluctuation between the communities, even though we’re very contiguous and clustered in the same Westside enclave, prices and demand differ between each area. “Brand” (think “address”) has much to do with choices buyers make, but frankly, there isn’t a community (brand) this isn’t top notch in my ‘neck of the woods’. The other thing we all need to remember is that a large sale or two will definitely skew all of these numbers.

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As Coldwell Banker sees it….
The top Previews agents meet quarterly to review what is happening in the high end of the real estate front in the
Los Angeles area. At our meeting a few weeks ago, a bus load of Previews agents bused up from Orange Country, so we were also able to gain a glance at the high end market in the OC! The oft repeated mantra “pricing is the key to selling homes in any market” was a constant theme throughout the entire meeting. The other overall comment that was made was the low level of inventory throughout the entire market, except in the upper high end.

Locally, what we are seeing is that there are some very hot markets and some markets, not so hot. Hancock Park is one of the more active markets today — prices are increasing rapidly in this tony section of Los Angeles. Hancock Park is attracting buyers who are seeing more ‘value’ for their money in this well-established neighborhood.

In other areas, it was reported that Malibu is “soft” but areas near Silicon Beach such as Venice and Playa Vista & Mar Vista are hot and strong. . And overall, the market for $10 million homes and up is not that strong with the buyers “sitting on the sidelines watching what is going on”, but in the $1,000,000 to $5,000,000 sector, the market is very strong, in essence giving us two different markets. What came out of our Previews meeting is that there is a lot of money out there — wealthy US, Chinese, and German buyers are focusing on Los Angeles and San Francisco. We’re fortunate to have what buyers want — they want quality, location, choice, and yes, weather.

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Millennials are making moves to the “Burbs”……
Millennials are on the move — not to urban centers, which heretofore have attracted this upwardly mobile generation. Their passions for culture, car-less city-life, and intimate urban landscapes were their choices over a suburban lifestyle found outside urban cores. Not so much today.

For the third year in a row — millennials comprised the largest number of recent homebuyers — 35% of all buyers. Younger buyers seem to be shifting from seeking homes in urban city centers to the more sedate suburbs. According to the 2015 National Association of Realtors (NAR) survey the share of millennials buying in an urban area decreased to 17% from 21%. Also, fewer millennials purchased multifamily homes than last year (10 % instead of 15 %).

Overall, the majority of buyers in all generations continue to purchase a single-family home in a suburban area, and the younger the buyer, the older the home they purchased. “The median age of a millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” said Lawrence Yun, NAR’s chief economist. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out. Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households,” he said.

Hot Spots….

Silicon Beach is driving a lot of new buyers into our Westside neighborhoods including Venice, Playa Vista, and Culver City. Mar Vista is becoming a ‘hot’ area and as I have said in the past, the farther East you go, you’re finding millennials moving in droves to these lower-priced homes. Since I started my real estate career in the Marina, I know how popular and active that market is today. If you want more information on what’s ‘hot’ in these areas, please call me at 310-442-1384.

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Getting ready to sell…better check out these handy tips
A lot of sellers still love their “castle’, and the thought of moving is sometimes a painful experience. But more often than not, I’ve run into homeowners who believe that they can just put a “For Sale” sign on their front lawn and that will do the trick. It doesn’t. I have found that a great location can, indeed, make the difference when it comes to “days on market” — but in today’s competitive climate, how your home presents itself to buyers will determine the final selling price.

When you’re ready to sell your home, make sure potential buyers see it at its best. Here are the top ways to fix up the appearance of your home without investing a lot of money. A little time and effort now will pay big dividends at closing.

Landscaping — Trim the grass and make sure all flowerbeds are freshly mulched and free of weeds. Prune overgrown shrubs, especially if they’re hiding windows or blocking the entryway. Fresh flowers go a long way in giving our homes a new look.

Fences — Reinforce sagging gutters and straighten crooked fences. Make sure the gutters are cleared of obstructions and the soil isn’t washed out around downspouts. A quick power washing will brighten fences, driveways and walkways. Clear away clutter like bikes, tools and toys. Use weed killer on grass and weeds that sprout in pavement cracks. Keep edges neat with a weed eater or edger.

Front Door — Freshen the door and trim with a new coat of paint. Tighten loose doorknobs, oil squeaky hinges and make sure the doorbell works. Clean any furniture or outside decorations. Add a colorful potted plant or a new doormat.

Foyer — Shampoo the rug or scrub and wax the floor. Add a fresh area rug and make sure it has a nonskid surface for safety. Hang a mirror to make your entry look larger and brighter.

Kitchen — Set a warm, inviting mood by keeping countertops free of clutter and adding decorative canisters or a scented candle. Clean out the refrigerator, degrease the oven, wipe down cabinet doors and keep the sink shining.

Bathrooms — Make sure your bathrooms sparkle. Clear countertops of unnecessary clutter. Replace discolored or damaged caulking. Fix dripping faucets and leaky toilets.

Closets — Organize the contents to make your closets appear larger. Donate unwanted items to charity and store what’s left in stackable plastic totes to maintain a neat, tidy appearance.

Garage – This is the time to sort through all the junk and decide what to keep and what to give away. Use easy-to-assemble storage shelves to stow tools and sporting goods; wall hangers for garden hose, blowers and other equipment.

Lighting — Replace burned out bulbs and clean fixtures, inside and out. . Consider replacing dated fixtures in the most visible locations. Install indoor track lighting to highlight artwork and open drapes and blinds to let in natural light. Outside use landscape lighting to accentuate architectural features.

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Los Angeles is joining a club it may not want to join….
Los Angeles is now the eighth most expensive city in the world for tourists and foreign business people. In a study released last week a rising U.S. dollar has pushed the City of Angels ahead of pricey metropolises including Tokyo and Shanghai.

Simon Baptist, chief economist at EIU, said in an interview that for Angelenos, the cost of goods and services in fact is not rising much because inflation has remained relatively low. But the sharp appreciation of the dollar against many other currencies since mid-2014 is making many American cities relatively more expensive for foreigners. And that could cut into the number of tourists coming to Southern California and curb their appetite for purchases.

The Worldwide Cost of Living survey, which has been conducted for more than 30 years, looks at prices of 400 goods and services, though it does not include the cost of accommodations.

“We know that international tourist arrival [numbers] are quite sensitive to this,” said Baptist. “They are less likely to come to the U.S., and those that do are likely to spend less.”Los Angeles welcomed a record 6.7 million foreign visitors last year, up 3.4% over 2014, and they spent $6.4 billion, the city said. Mexico, China, Canada, Australia and the United Kingdom were the top sources of overseas visitors. While Mexico supplies the most foreign tourists, China’s numbers are growing the fastest of any country, up more than 13% last year to 779,000.

On the list of 133 cities compiled by the Economist Intelligence Unit Singapore, Los Angeles, which ranked 27th last year — is now only slightly less expensive than New York, which ranked 7th. Singapore remains the world’s most expensive place for visitors and expats, followed by Zurich, Hong Kong, Geneva, Paris and London. The less expensive cities were Lusaka, Zambia; Bangalore, India; and Mumbai.

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Fashion trends transcend to interior design
For Coldwell Banker’s Previews International, we are immersed in the world of luxury real estate, and so it is natural to ask: “Which fashion trends will cross over into the world of home decor?” After all, fashion and interior design have been closely linked for decades. According to New York City-based designer, Phillip Thomas, “…there is an undeniable link between the worlds of interior design and fashion. Each pushes the other in new directions by the use of colors, patterns, and texture. You often see fashion designers crossing the line into interior design by the creation of homes collections including furniture and fabrics.”

He listed five major trends where fashion crosses over into luxury interior design….1) Feminine Romanticism: “I see this trend manifesting itself in interior design with beautiful florals.” 2) Sparkle: “By sparkle, it was not just the use of metallics, like golds and silvers, but also the use of shimmer and reflectivity. In interior design, this trend is apparent in fabrics, embroideries and trims that incorporate sequins, to wall coverings and specialty plaster finishes with metallic elements or contrasting sheens.” 3) Tie Dye: “The runways also saw the resurgence of tie dye which is often indicative of the relaxed appeal of the summer wardrobe and an offshoot of the street art influence seen in 2015 collections. Tie dye has made it in to fabrics and wall coverings from designers both in the United States, to European houses. Gauzy linens with tie die motifs, for example, invigorate existing summer spaces breathing new energy.”4) Futurism-Silver: “The fashion runways continued this love for grey by featuring textured metallic’s, such as mirrors and lame, in their fashions. This story has been interpreted in interiors through the use of materials such as glass and mirror which have had a renaissance based on production innovations that have allowed for the creation of new and dynamic materials.” 5) Stripes: “Although quite simple in concept, stripes can often be a challenge, as colors or proportions can impact the end result. Interior designers are using stripes interpreting them new and bold manners. Striped wallpapers are used and cut in asymmetric manners to create fractured wall surfaces with depth and movement.”

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Life continues to be good and busy.

I have a number of new listings coming up and am working with my sellers in helping them get their homes ready to put on the market plus working on my existing escrows getting ready to close. In the mean time, I am also working on my house, installing outdoor lighting in my garden, painting the exterior of the house, and removing and planting some new trees and flowers. We are also working on my new web site, which I invite you to visit.. caroleschiffer.com, and to Face Book me… www.facebook.com/CaroleSchifferRealtor.

I am here to assist you with all of your real estate needs, so please do get in touch with me.. Carole@caroleschiffer.com or 310 442-1384.

I would like to Subscribe to the SchifferLine

Timely Real Estate News…………………………….. 1 March 2016

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Existing home sales highest in six months
The National Association of Realtors reported that existing-home sales crept forward in January to the highest annual rate in six months, and subpar supply levels propelled price growth to the fastest increase since last April. The West was the only region to see a decline in sales in January….however, Carole Schiffer noted that as a region, the Westside traditionally bucks regional trends. “We’ll know more after the local MLS releases February statistics,” she stated.

Nationally, the total existing home sales — which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, inched up 0.4% to a seasonally adjusted annual rate of 5.47 million in January from a downwardly revised 5.45 million in December. Sales are now 11.0% higher than a year ago – the largest year-over-year gain since July 2013 (16.3%).

Lawrence Yun — NAR chief economist, says existing sales kicked off 2016 on solid footing, rising slightly to the strongest pace since July 2015 (5.48 million). “The housing market has shown promising resilience in recent months, but home prices are still rising too fast because of ongoing supply constraints,” he said. “Despite the global economic slowdown, the housing sector continues to recover and will likely help the U.S. economy avoid a recession.”

Around the country, the median existing-home price for all housing types in January was $213,800, up 8.2% from January 2015 ($197,600). Last month’s price increase was the largest since April 2015 (8.5%) and marks the 47th consecutive month of year-over-year gains.

Nationally, total housing inventory at the end of January increased 3.4% to 1.82 million existing homes available for sale, but is still 2.2% lower than a year ago (1.86 million). Unsold inventory is at a 4.0-month supply at the current sales pace, up slightly from 3.9 months in December 2015.

First-time buyers stay in the game…
Lower interest rates have helped first-time buyers, but overall again throughout the country, their entry into home ownership remains the same — the share of first-time buyers remained at 32% in January for the second consecutive month and is up from 28% a year ago. First-time buyers in all of 2015 represented an average of 30%, up from 29% in both 2014 and 2013.

All-cash sales were 26 % of transactions in January (24% in December 2015) and are down from 27% a year ago. Individual investors, who account for many cash sales, purchased 17% of homes in January (15% in December 2015), matching the highest share since last January. Sixty-seven% of investors paid cash in January.

Days on market — always a key indicator…..Properties typically stayed on the market for 64 days in January according to the NAR, an increase from 58 days in December but below the 69 days in January 2015. Short sales were on the market the longest at a median of 77 days in January, while foreclosures sold in 57 days and non-distressed homes took 61 days. Thirty-two% of homes sold in January were on the market for less than a month.

“What we have been seeing in the communities I report on each month, days on market have been markedly down from a year ago. Lower inventories account for the competitive landscape, of course,” Carole Schiffer said, “but the demand for quality residential neighborhoods continues to speed up the buying process. Even lower-priced neighborhoods that have not traditionally been ‘hot’ — such as those east and south of the Westside — have become the ‘next-big’ thing for Millennials and first-time buyers. Where else can they go?” Carole also points out that the booming Silicon Beach areas of Venice, Playa Vista, Santa Monica and Culver City are ‘on fire’ right now.

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Home prices are also moving up…..in LA and Orange counties
You just read where home sales are up across the US, well, home prices are showing strength according to S&P Case-Shiller Index released last week. Los Angeles and U.S. home prices are showing renewed strength, even amid concerns over the general health of the national economy.

Nationally prices climbed 5.43% in December compared with a year earlier — the fastest pace since July 2014, according to the S&P/Case-Shiller. In Los Angeles and Orange counties, prices surged 6.17%, a slight pickup from the prior two months and ahead of the mid-5% range seen in the beginning of 2015. The acceleration bucks the prediction of many economists for weaker home price growth.

The robust figures also suggest that the market is withstanding jitters about the direction of the U.S. economy, which began with wild stock market swings in August because of the devaluation of the Yuan and concerns about China’s slowing growth. But economists said low mortgage rates, job growth at home and few houses for sale are driving up prices in the U.S.A.
A major factor in the price increases is the lack of homes for sale, which Carole Schiffer noted above.

In the Los Angeles region, there was a 4.8-month supply of homes for sale in January, meaning that if homes sold at their current rate there would be none left after that time frame. That compares with a 5.5-month supply a year earlier and a six-month supply economists consider a healthy balance, according to the California Assn. of Realtors.

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2050 is coming….and it will be vastly different for our world
It’s not Orwellian to think of 2050 as another 1984, which was most famous for the introduction of the Apple Macintosh incidentally, but according to demographers and futurists — life on our planet will be vastly different than today according to real estate guru Inman. For example, the world’s urban population will reach 6.3 billion by 2050 according to the United Nations, from 3.9 billion currently.

Two-thirds of the world will live in towns and cities, compared to 54% today, and there will be more — what the UN refers to as —“megacities”, defined as cities with populations of more than 10 million. And there will be 41 megacities by 2030 from just 28 in 2015.

For the real estate market, this means higher prices per square meter and shrinking living areas in city centers — a trend already present in Asian cities such as Hong Kong and Tokyo. Average Japanese flats are now 14% smaller than 10 years ago, currently just 60 square meters, according to The Economist.

Inman’s article last week noted that society is on the brink of a new era that will be shaped by major advances in technology and lasting demographic transformations. Over the next 20 years, changes in consumer models and behavior as well as the environment will affect how we do business, the value of property investments and even the global real estate market as “we know it” today.

Here are the megatrends we can expect in upcoming years. 1) population growth; 2) aging demographics; 3) environmental laws; 4) e-commerce advances; 5) smart-home technology; 6) telecommuting; 7) distance learning, and independent travel. Inman also noted that by 2025, housing supply in big cities will be under more pressure, which will make buy-to-let residential property a good long-term investment. Living in downtown areas will be even less affordable and will force people into ever-growing suburbs.

So, what are your real estate choices for the future? According to a leading economist, “…mitigate the risks posed by the current trends by choosing reliable and clear markets like the USA, the UK and Germany. When studying investment opportunities, keep in mind the possibility of adapting it to future needs and possibly changing its function.”

Another good piece of advice is to choose property in good locations with good growth potential over the next coming 10 to 15 years. Yields may be lower, but price growth should compensate for the smaller annual revenue. For bigger budgets, retirement homes and warehousing facilities are a good bet thanks to growing demand and higher yields than most market segments. The report went on to say that investors with up to $1 million should consider residential property because
everybody needs a home, especially in the age of the Internet. “Isn’t this why the Westside remains so attractive to buyers seeking not only a safe haven but who want the quality life style we uniquely offer?” states Carole Schiffer.

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California home foreclosures get help…..
A California program intended to prevent home foreclosures that was expected to shut down next year is instead being expanded and extended following a new influx of federal funding. Keep Your Home California, which already had been awarded nearly $2 billion, will receive up to $463.5 million in additional federal money to aid troubled borrowers.

The program has assisted 54,010 California homeowners as of Sept. 30, according to the U.S. Treasury Department. Treasury announced the increase Friday as part of a $2-billion expansion of its Hardest Hit Fund, which launched in 2010 and earmarked $7.6 billion to 18 states and the District of Columbia.

California will receive about $213.5 million in the first distribution of new funding. The state could get an additional $250 million in a second phase, which the department expects to award by the end of April.

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El Nino — where are you?
If you’re like millions of Southern California Smartphone users, when you look at the weather app, one thing is clear: No Rain in our future. Like that old ‘70s song — “It never rains in Southern California”, our weather forecasts have a certain validation to a lifetime of unkept promises by weather forecasters.

It wasn’t surprising to see Steve Martin, the weatherman in the film “LA Story”, pre-record his weekend weather forecast so he could keep a date with his new girlfriend in Santa Barbara…”It’s sun, sun, sun…everywhere” as Martin throws Velcro-backed suns onto Southern California’s weather map. Only problem, it rained that weekend. Martin’s character was fired on Monday. What we need now is Martin to take another vacation to Santa Barbara. We need him back on the air.

That’s all, folks…..

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.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
©2016 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