The SchifferLine
Timely Real Estate News………………..15 December 2021
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Sales volume reaches $5.101 billion…a record
It comes as no surprise as sales volume for the first 11 months of 2021 reached a record $5.101 billion, a 48% increase over the same period in 2020, for the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood. While the percentage of increase over the previous 11-month period is a bit lower than at the end of October, the numbers are really staggering. It doesn’t seem to be abating. Mind you these increases are not particular to these communities but are all across the board. I am just discussing these five areas.
This record reflects the sustained success we have had for attracting buyers by offering the world’s most beautiful homes and neighborhoods…so really it is no great surprise that we continue these incredible sales achievements. The usual suspects continue to lead the sales increases — Beverly Hills was up $768 million in volume compared to a year ago, Brentwood came next with an increase of $419 million, followed by Westwood/Century City at $189 million-plus, with BHPO adding $163 million and Bel-Air/Holmby Hills bringing in $156 million. Marina del Rey, another area I specialize in, enjoyed an 86% increase in sales volume, reaching $214 million through November 2021 compared to $115,851 a year ago for the same period.
Homes are now selling at near 100% of original listing price, which is a positive upturn as some of the areas last month were experiencing as much as a 15% decline between the original asking and final sale prices….what does this mean? Sellers are getting better educated and are pricing their homes competitively. Some areas, where multiple offers were just ‘out of control’ were up 105% over original listed price. Just this past week, I was representing a buyer who is a long time client of mine in the attempt to purchase a fabulous home in Santa Monica. Seems that a number of potential buyers felt the same way about the house as there were 25 offers! It came on the market for $2,595,000, but the price was increased 2 days later by $100,000 and while we are not sure what it sold for, it
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Median sales prices….coming up roses !
Beyond record sales prices, we are also seeing record median sales price increases across the entire area. The isn’t new to those reading the Schiffer Line as I have been pointing out that our pricing continues to steadily move upward, and as the year has matured, our prices are also making increased gains in every area.
For example, Beverly Hills median sales price for November 2021 is $7.500 million, up 15% over November 2020. Beverly Hills Post Office is up 14% to $3.383 million….Bel-Air/Holmby Hills is up 30% to $3.025 million. Brentwood was up a whopping 73% through the first 11 months for 2021 at $3.874 million, and Westwood/Century City experienced a 13% increase to $2.626 million. Marina del Rey was up 18% for 2021 at $2.012 million.
November can be a bit crazy sometimes, because traditionally, it is the period of the once-assumed ’slow season’, which — as you can see — is not slowing down much. When you compare my areas’ performance of November 2021 to November 2020 (month-to-month), there are some stark differences. Bel-Air/Holmby Hills was up 246% in median sales prices to $7.987 million from $2.305 million, quite a jump. Beverly Hills was up 28% to $7.500 million (over November 2020), Westwood/Century City was up 97% to $5.200 million, Brentwood was up 63% to $5.200 million. However, BHPO was down 28% to $1.925 million, unusual for this very ‘hot’ area. Please remember my oft pointed out comment, when there are some high number sales such as the two in Beverly Hills a $16,050,000 and $21,500,00 respectively or BHPO for $21,500,000 or Bel Air for $9,000,000 or Brentwood for $13,000,000 and $16,645,000 and lastly in Westwood $12,800,000. These numbers obviously impact the averages. I must also remind you that these are transactions that went through the Multiple Listing Service, thus any and all private sales and there are many are not covered here.
My broken-record speech — the best measurement is to watch the trend lines of median sales prices over a period of a year…everything evens out over time, and the true value of properties emerge through the analysis of accumulated month-to-month data we get from the MLS. We’re in a good place — mortgage rates remain low (even in the mid-3’s — and Fannie Mae and Freddie Mac have increased the conforming loan limits to $970,800 which will enable many buyers to avoid obtaining a jumbo loan whose interest rates while still low are higher than the prevailing rates for a non jumbo loan.
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Re-financing takes dramatic upturn
A brief drop in mortgage rates, due to the first news of the omicron variant, caused mortgage refinance demand to rise dramatically last week. The rate drop wasn’t all that dramatic when looking at the weekly average of the 30-year fixed. However, the rise focused on how homeowners are now looking at ‘remote work’ continuing for some time and are adjusting to improving their home environments…hence the need for re-financing.
For loans with conforming loan balances ($548,250 or less through the end of 2021), fell to 3.30% from 3.31%, with points decreasing to 0.39 from 0.43 (including the origination fee) for loans with a 20% down payment, according to the Mortgage Bankers Association.
Again, that was the average. Rates had dropped sharply at the end of the previous week and then stayed there for a short period of time. However, it was enough time to cause a 9% jump in refinance applications week to week, seasonally adjusted. They were still 37% lower than the same week one year ago. Mortgage rates were 40 basis points lower at this time last year. Still, these are great rates compared to pre-‘Covid when rates were approaching over 5%.
Government (FHA) refinance demand saw an outsized 20% weekly increase. The refinance share of mortgage activity rose to 63.9% of what it had been in the past.
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High-end sales
The high end of the Westside residential market just keeps getting stronger and stronger. There have been 1,032 closed sales of $5 million-plus so far this year, versus 636 at this time last year…that’s up 62%! Of these, 341 were $10 million-plus, versus 181 at this time last year, up 88%. Ninety-two (92) $20 million-plus were sold and there were 49 at this time last year— up 88%.
Twenty-nine (29) were $30 million-plus, versus 16 at this time last year or up 81%. Fourteen (14) were $40 million-plus, versus six at this time last year, up 135%! Seventy (70) of the 92 were $20 million-plus were sold to American buyers or 76%. Of the 92 $20 million-plus sales, 37 were not officially listed when sold. It is interesting to note how the highest-priced sale for the past three years has continued to rise.
The highest priced sale in 2020 was $165 million, and for this year, $177 million. Maybe we will have a $200 million sale in 2022.
The second top sale this year was in Malibu. The top sales in the other areas are Pacific Palisades for $83,000,000 and was unlisted when sold. And Bel Air had an unlisted home sell for $69 million.
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Rent hikes are heading our way, big time in 2022
Not only are we seeing dramatic increases in median sales prices in Los Angeles area and beyond, but we should also expect to see rental housing increases like never before. In some areas of the country, rents are doubling from a year ago. The reason is — huge demand and lack of supply.
We’re currently behind as much as 2 million housing units in California, where development of new housing encounters continued red tape at every level, and cities/counties simply cannot process the paperwork to keep up
with demand.
But the problems aren’t confined to the law of supply/demand. Rents for single-family homes across the country jumped more than 9% on average in August 2021 from the prior year, according to a report from the analytics firm CoreLogic. It is estimated that rental housing has become so expensive in California that more than 50% of a renter’s income goes for housing. However, it is worthy to note that a state law states that a landlord may not increase rent more than 5% annually, plus the CPI increase.
Mark Zandi of Moody’s Analytics said the strains on the housing construction market were building well before the pandemic took hold in the states. “There’s a lot of evidence that the lack of housing closer to where the demand is and urban cores is having a meaningful negative consequence on long-term economic growth.“
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Pending home sales increased in October
Pending home sales increased in October, rebounding after a decline the month prior, according to the National Association of Realtors (NAR). Contract activity rose month-over-month in each of the four major U.S. regions.
On a year-over-year basis, however, transactions were split, as two regions reported drops and two others posted gains. The NAR Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, rose 7.5% to 125.2 in October. Year-over-year, signings fell 1.4%. An index of 100 is equal to the level of contract activity in 2001.
“Motivated by fast-rising rents and the anticipated increase in mortgage rates, consumers that are on strong financial footing are signing contracts to purchase a home sooner rather than later,” said Lawrence Yun, NAR’s chief economist. “This solid buying is a testament to demand still being relatively high, as it is occurring during a time when inventory is still markedly low.
“The notable gain in October assures that total existing-home sales in 2021 will exceed 6 million, which will shape up to be the best performance in 15 years.” And while the market is expected to remain robust, Yun forecasts home prices will rise at a gentler pace over the course of the next several months and expects demand to be milder as mortgage rates increase.
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Environmental update
California regulators voted last week to ban the sale of new gas-powered leaf blowers and lawn mowers starting in 2024 and portable generators by 2028, the latest step in the state’s aggressive effort to reduce harmful pollutants and transition toward a carbon-free economy.
The new regulations by the California Air Resources Board require all newly sold small-motor equipment primarily used for landscaping to be zero-emission by the target dates, with some exceptions.
The agency’s decision is based in part on the belief that battery technology will improve, and zero-emission gear will
become more widely available before the requirements kick in — though there will be an annual review to determine whether they are on target and whether regulation needs to be altered or delayed.
The restriction applies to homeowners and commercial landscapers alike, and the ban also includes gas-powered weed trimmers, chainsaws and power washers. The regulation does not ban existing gas-powered equipment, however, which can continue to be used.
Combined, these small gas-powered engines create as much smog-causing pollution in California as light-duty passenger cars. There are approximately 15.4 million small off-road engines in California, and they produce about 141 tons of smog-forming emissions per day, according to the agency.
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So, what about me?
It is not about me at all… As previously noted, while the office is a little quieter than usual, the market and my business is moving along at a brisk pace! None of my buyer clients are a breather in their quest for a new home. I have been working very hard to put my escrows to bed in the hopes that I will have a quiet and hopefully restful holiday It is a challenge, but I am working at it. I still have a number of potential buyers who are ready, willing and able to buy their new home, so sellers if you want to move, contact me… Carole@caroleschiffer.com or 310-442-1384. I am here to make it happen!
For the Thanksgiving holiday, I had some guests for dinner and then at 10:30 at night after we cleaned up my sister brother-in law and I headed down to our home in Coronado 
where none of us had been since February 2020. This house is our family “happy place” and it was wonderful to be there once again. We have a pet Seagull there whom we have named “peg leg” as you can see, he has only one leg. It was amazing to us that after not being there for almost 2 years the minutes we opened our window blinds in the am, there he was sitting on our window ledge waiting for his breakfast! He came back for every meal. Wonder who has been feeding him while we were gone?
We had our office holiday party last week, and I was able to visit with Santa Claus and share my wish and gratitude for this excellent past year.
I hope you have a wonderful holiday and have the ability to spend the holiday with family and friends
Thank you all again.
Merry Christmas,
Happy Kwanza and
Happy New Year!!!
Buyers continue to compete for a limited number of homes for sale across America, according to the National Association of Realtors (NAR). Existing-home sales increased 0.8% in October from the prior month to a seasonally adjusted annual rate of 6.34 million, the highest pace since January. Even though prices increased from September to October this year, sales fell 5.8% since last October 2020 when the market was at its peak for this cycle.
First-time buyers accounted for 29% of the existing-home buyers, a lower fraction compared to one year ago (28% in the prior month, 32% one year ago). The share of cash sales rose to 24% (23% in the prior month, 19% one year ago). The share of non-primary residence buyers (for rental and vacation/second home use) rose to 17% (13% in the prior month, 14% one year ago). Realtors reported that 23% of buyers waived the appraisal contingency clause (buyers who waived appraisal are likely cash buyers); and 21% waived the inspection contingency clause.
Also noteworthy: IBuyer Market share in Phoenix, the largest iBuyer market, peaked to a new high of 10.8%. This is the first time iBuyers have exceeded 10% market share in a major market — a significant, if temporary, achievement.
These driving forces to move as well as further sales figures appear in the National Association of Realtors’ 2021 Profile of Home Buyers and Sellers, that analyses demographics, preferences and experiences of buyers and sellers across America. “During the pandemic, buyers and sellers have been driven by the desire to be close to family and friends, as well as the need for a larger home,” said Jessica Lautz, vice president of demographics and behavioral insights at NAR.
American home buyers are having to pounce faster than ever to clinch a deal, forcing many of them to make snap decisions about what house to purchase and how much to pay. I see it constantly — buyers are so afraid to miss a ‘deal’ or opportunity to purchase a home, they will bypass their own normal, conservative deliberations to ’snap up’ a home these days.
year, marking the second-greatest annual gain ever recorded.
In the third quarter, builders’ broke ground on 16,000 single-family homes slated to become rentals. That’s the highest quarterly total of housing starts for built-to-rent homes going back to at least 1990, according to an analysis of U.S. census data by the National Assn. of Home Builder
First a bit of personal sharing. As most of you may recall, my Mom passed away in June of 2020, and due to Covid my sister had not been able to come here until Sept of this year. Prior to that, she and our beloved caregiver/housekeeper for the last 40 years, over FaceTime went through EVERYTHING in Mom’s house and determined how things would be disbursed. It was an horrific job as Mom kept everything.. But they finally got through it and had items separated and packed up. Finally, this past Sept, my sister and brother-in-law were able to come here and have done so for the past 3 months, staying for two weeks at a time reviewing all of the boxes and making a detailed inventory of what was being sent to Canada and what is staying here.
As for work, I am busier than I have been in a long time. Buyers who are thrilled to have found a home to purchase and jumping through hoops to deal with multiple offers and prevailing. Sellers who are dealing with buyers and some of their at times unreasonable demands.
in their holiday decorations. It creates such a warm and homey feeling and makes it easy for buyers in see themselves living there. Contrary to common thought, the holidays have not slowed the market down at all. My loan officer told me yesterday that he had 11 openings for loans yesterday after the Thanksgiving holiday weekend!!!!
Compared to a year ago, sales volume for 2020 is up 62%, which underscores the buying frenzy in today’s hotter-than-hot real estate market. Will it slow down? Perhaps, but it does not appear likely in our neck of the woods. We have made incredible strides in sales volumes for the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood, which saw sales volume at $5.005 billion through October 2021 compared to $3.077 billion at the end of October 2020. That is just amazing to see these numbers continue to accelerate upward. There were some whopping sales prices which I will get into a little later.
These median sales price increases represent the largest leap in years as buyers are grabbing homes quickly. If homes are priced competitively, they’re going to move quickly, but while prices are up, we also saw last month a significant lag between original sales price vs. final sales price, with Beverly Hills showing 85% of its OSP vs it final selling price. BHPO was at 89%; Bel-Air/Holmby Hills was at 90% and Brentwood was at 95%. Only Westwood/Century was at 100% — a testament to this Westside powerhouse community. What this means is sellers are much more optimistic about what their homes are worth — off by as much as 15%. The house is worth exactly what someone is willing to pay for it and what the seller is willing to sell it for, and while there is a buying frenzy going on, buyers are not stupid. The do their research and in today’s data-driven world, which is no surprise. I know — I deal with very demanding, sophisticated buyers every day!
We are ahead in sales of $30 and $40 million-plus as well….Of the 87 sales of $20 million-plus, 28 were $30 million-plus, versus 13 at this time last year up a whopping 115%. Sixteen (16) were $40 million-plus and there were six currently last year, up 166%.
The decision comes as the company’s third-quarter results showed it lost more than $380 million in the flipping operation, called Zillow Offers. The business hit a major snag in recent months as the company’s algorithms caused it to overpay for houses just as the heated U.S. market began to cool slightly, forcing it to list properties at a loss.
Trouble, we have trouble….or do we? The good news is that homeowners are keeping up with their mortgage payments or arranging for loan modifications with their service providers. But housing analysts say that while the real estate market still faces pandemic-related fears about a wave of delinquencies, higher home prices are helping to alleviate some of those concerns. The overall delinquency rate fell to the lowest level since the onset of the pandemic, CoreLogic, a real estate data firm, reports. “However, the decrease in delinquencies masks the serious financial challenges that a part of the borrower population has experienced,” Molly Boesel, economist at CoreLogic, writes for CoreLogic Insights.
The Labor Department reported Wednesday that consumer prices rose strongly in October, up 0.9% on a seasonally adjusted basis from the prior month. Over the last 12 months, inflation is up 6.2%. So-called core prices, which exclude food and energy items, rose 4.6% over the past year. Both are the largest annual increases in more than 30 years.
So much for waiting for the dust to settle. While many think they see the light at the end of the pandemic tunnel and return from their rural adventure, they are shocked to see how rental prices have move upward, to many, out of reach.
Noted for its small-town, country-like atmosphere, Brentwood features a wonderful neighborhood of shops, fine restaurants, and an active lifestyle of sports enthusiasts who jog up and down beautiful San Vicente Boulevard in the meridian to nearby Santa Monica Beach.
Life is busy and interesting! My sister & brother-in-law have been here two weeks, two weeks off working in Mom’s house getting it ready to sell. They have done a tremendous and enormous job. We are almost there and have 3 or 4 potential buyers we are working with. Having them stay with me has been great and fun, and I really miss them when they are back home.
I hope you have a wonderful and restful Thanksgiving with your family and friends. Would love to hear how you celebrated the holiday with it being the first time in a long time that we can be with family and friends again.
The number of homes on the market has held well below historic levels, forcing buyers to compete in bidding wars and pushing up home prices. The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay.
Mortgage rates have been on a tear this past month, rising yet again last week to the highest level in eight months. That caused mixed demand for mortgages last week, resulting in no change from the week before. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) increased to 3.30% from 3.23%, with points decreasing to 0.34 from 0.35 (including the origination fee) for loans with a 20% down payment. That rate was thirty basis points lower one year ago.
co-ops, rose 7.0% from August to a seasonally adjusted annual rate of 6.29 million in September. However, sales decreased 2.3% from a year ago (6.44 million in September 2020).
Bel-Air Park is situated just off world-famous Mulholland Drive, where many of the homes feature large lots, some with magnificent views. Bel Air Park is adjacent to the world renown American University of Judaism and Stephen S. Wise Synagogue, and school and is a neighborly “community” unto itself.
But the totals were far lower in the Southland’s Los Angeles International Airport on Monday recorded 0.39 inches, which was a daily record but still a far cry from areas like Placer County’s Blue Canyon, which received more than 10 inches in the storm.
The exodus started on March 11, 2020, when the World Health Organization officially announced we are in a global pandemic. We are still in it, and this has transformed most of the world as we see it today — workers remain remote, and many of them want to keep it that way. Are we creating a Remote Culture that will permanently change cities and the way we work forever?
This has resulted in owners of tall office buildings, for example, to begin addressing their workspace environments. They are realizing it may take a lot of convincing to get workers to leave their comfortable home offices to come back to the office increasingly taking on remodels to attract employees back, adding amenities such as outdoor terraces, private gyms, green spaces, lounge areas, and flexible conference centers.
As you all know by now, I have a very busy Real Estate career, and it keeps me hopping and I Love it. Every day brings something and someone new – it keeps the juices flowing and I would not want it any other way .
Buyers are thirsty, and they are quenching their lusty thirst by spending millions on homes on the Westside as sales volumes continue their rapid rise each month in the five communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City and Brentwood. Sales volume increased over 64% to a record $4.492 billion through the first nine months of 2021, which compares to $2.740 billion a year ago. Of course, the law of inventory supply and buyer demand come clashing together each day in our market, as buyers are scrambling to capture their dream home, often fighting through a line of other home seekers, eager to kick up their offers to close the deal. It has been mostly a civil process as many buyers walk away, hopelessly disappointed as for many, this is not their first loss….but they keep looking.
Beverly Hills’s median sales price was up 18% through the month of September at $7.424 million; Beverly Hills Post Office was up 12% at $2.297 million; Bel-Air-Holmby Hills was up 24% at $2.900 million; Westwood/Century City came in at $2.648 million, up 8% and Brentwood rose to 16% at $3.700 million. Pacific Palisades was up to $4,037 million, up 21% for the year.
Mortgage loans that exceed conforming loan limits set by Freddie Mac and Fannie Mae are estimated to reach $550 billion this year Bank of America estimates. A large share of that has been held in bank portfolios, but more is being securitized or sold to investors as private mortgage-bond deals, MarketWatch reports.
Pending home sales rebounded in August, recording significant gains after two prior months of declines, according to the National Association of Realtors. Each of the four major U.S. regions mounted month-over-month growth in contract activity.
Seventy-six (76) were $20 million-plus this year and there were forty-four closed sales of $20 million-plus at this time last year, an increase of 73%. Twenty-six (26) of these sales were $30 million-plus this year, versus thirteen at this time last year, up 100%…and fourteen, were $40 million-plus this year and there were only six at this time last year, up 133%.
UCLA predicts gross domestic product will grow this year at 5.6%, down from the 7.1% rate forecast in June. It expects the economy to expand by 4.1% next year, down from the 5% anticipated earlier.
It was reported this week in the LA Times that summer 2021 is the driest we have had since 1895. It does not ever rain here — we are all beginning to feel that way (and, no, a drizzle is not rain).
First of all, the best news, after not seeing one another nor being together since Feb ‘2020, my sister & brother-in-law were here for 2 weeks and will be back this coming week for another 2 weeks to work on cleaning out our mom’s house and getting it ready to put on the market. It was wonderful seeing and being with them. They stayed with me, and it was great catching up with one another. Depending on how much gets done on this next trip, there will be another trip in November, perhaps, even for American Thanksgiving (they celebrated Canadian Thanksgiving this past Monday!). Now that the borders between the US and Canada are open again, I will be celebrating Christmas with them in Canada!!!
In the meantime, my work has been keeping me busy. Hopefully, sometime soon you will have the opportunity to meet my assistant, Miguel, who I call Mr. M. He has been of great assistance to me in handling my business. My lovely listing in Bel Air Park sold after being on the market for a little less than 3 weeks, and my last listing in Bel Air Crest, leased in 13 days for over asking! I also am working with about 10-15 buyers all of whom are looking to purchase homes in the Bel Air Crest, Mountaingate and or Beverly Ridge areas, with the lack of inventory we are all dealing with, I am searching for properties to put them into…SOOOOOO if you ate at all considering selling your home in any of these areas, or any other for that matter, please contact me…Carole Schiffer, 310-442-1384.
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