Timely Real Estate News….1 August 2007
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Hello all of you Muggles!!!
It isn’t all bad news….so don’t take it personally, OK?
There’s a lot of news these days this week about the housing slump, mortgage lenders with no cash to lend, looming recession, and perhaps even a repeat of the Internet collapse of 2001. Well, don’t believe everything you read, especially when it comes to ‘your castle’.
Of course, we are not insulated from the nation’s housing situation that is seeing builders and mortgage lenders predicting dire futures at least to the end of next year. Oversupply, higher mortgage rates and a clamp-down on sub-prime loans are, indeed, affecting the national housing picture. And
housing, as we all know, affects more than builders and lenders — it runs through the entire economy, and that’s why many are worried about the nation’s economic health.
As reported in the NY Times on Wednesday (August 1, 2007), it works like this: Less home building means less paint sold to homebuilders; less home sales also means builders buy less trucks; less trucks mean less paint to sell to automakers. This adds up to a big loss to DuPont who sells a key
pigment that goes into paint for homes AND trucks. This explains why DuPont was the market’s biggest loser last Tuesday even though they don’t build homes.
As most of you know, there are only a few ‘large’ tracks of homes or lots being built in Bel Air, Brentwood and Beverly Hills these days so that many of these negative national home-building trends by-pass our neighborhoods — but can affect us
Let’s look at our micro-climate market….how are we doing?
In the face of these negative economic stories, I think it’s important to share with you the state of our real estate market, which I have viewed as a ‘micro-climate’ within the larger geographical picture. Every month, I review the Combined Los Angeles Multiple Listing Service records of sales for the previous month, comparing last month’s median sales prices vs. the previous year. I primarily focus on three areas (Beverly Hills, Bel Air, and Brentwood) — and, as always, some areas are up one month, down the next, but the overall median sales prices for these three communities are up over 2006 by an average of 4.1%, which runs counter to national trends.
Specifically, for July 2007 Brentwood’s median sales price was up 22.1% over the same period in 2006, the days on market was 149; Beverly Hills was up 27% over last year, the days on market was 78; and Bel Air was down 12.1% compared to 2006, and the days on market was 73.
Compounding the challenges of getting a reality check on our market, however, is the manner in which the privacy issue of publishing sales prices is being handled today. Here is what is happening, after a property is in escrow, the property is being withdrawn from the MLS, thus avoiding the necessity of having to publish the sales price. This is being done generally with the higher priced homes. In the process of doing the research for this newsletter, I looked up 6 homes between
the prices of $5,000,000 – $15,000,000 that had been withdrawn from the market last month and three of them had in fact closed escrow! This is a short term solution as generally within a month of the close of escrow the public records which are generated by the county recorder office, can and does publish the
sales prices and that information is available to anyone who cares to do the research. In my opinion, what this practice does is unfortunately skew the overall median sales prices and the state of the market for that period.
Property values continue to rise…the advent of the ‘Platinum Triangle’
A good example of these hidden sales was reported in the Los Angeles Times last week — in the first four months of 2007, there were 23 estates selling for at least $10 million according to records kept by local agents (not the MLS). By contrast, Dataquick — the La Jolla-based real estate tracking firm
— reported home sales in Los Angeles County fell by 19.1%. Property values in the Platinum Triangle communities of Bel Air, Beverly Hills and Holmby Hills climbed 9% between January 1 and May 30, compared to 3.9% for the rest of LA County.
What does all this tell us? We live in a great area that continues to enjoy
high demand for its fine homes, schools, and shopping area. Not to mention
the weather.
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Sepulveda Project — next public meeting, August 22, Skirball Center
The revised EIR has been finished and will be presented to the public at the next public
meeting for the Sepulveda Project will be August 22, at the Skirball Center beginning at 6:30 p.m.
.Nearly 400 attended the last meeting to hear about the plans for Sepulveda Boulevard widening and the 405 expansion. I encourage all of you to attend this very important meeting.