Timely Real Estate News……………………………………………………. 1 December 2012
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Macy’s 86th Thanksgiving Day Parade, we love a parade!
It isn’t the Rose Parade (what is?), but for three hours, more than a 1 million New Yorkers and visitors lined the parade route (and millions more on television) and watched the 86th version of the famous Macy’s Thanksgiving Day parade. Most of us are familiar with Pasadena’s Rose Parade, which began on January 1, 1890, but what makes Macy’s Thanksgiving Day parade different is that instead of using real flowers and ingredients to make their floats (a requirement since the beginning of the Rose Parade), Macy’s version feature ‘helium’-balloons of vastly different sizes, shapes and themes.
And adding to the glamour of Macy’s parade are the many stars from the entertainment fieldĀ which, for the most part, do not dominate Pasadena’s parade like they do in New York. But, hey, this is New York we’re talking about and Macy’s has been tooting its own horn since the employee-inspired parade came into being to celebrate ‘how thankful’ many immigrants were for being in America and working for Macy’s!
Parade history is full of interesting tales — mostly about the few mishaps that occur every so often, such as in 1957 when the Popeye The Sailor balloon’s hat filled with water during a heavy rain which caused the balloon to go off-course and pour water on the crowd…or in 1985 when Kermit the Frog’s balloon tore at the stomach and it deflated, but no one was injured. The biggest culprit to balloons appear to be lampposts who — with their pointed tops — are not balloon friendly with the “stars” of the parade — when high winds occur or when balloons are improperly inflated, then tend to encounter the lampposts, and “bam!”, they’ll go down, but most often than not, no one is injured.
Oh, one last thing: The Macy’s Thanksgiving Day parade, with Santa Claus being officially welcomed at Macy’s famous headquarters store in New York, it marks the “Official” start of the Christmas season. I guess Macy’s didn’t check with other retailers about when the Christmas season officially started!
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Good news on the home front….existing home sales strengthen
Well, it’s safe to go back into the real estate waters according to the National Association of Realtors (NAR). The NAR reports that there is a continuing strengthening in the housing market recovery as sales of existing homes increased 2.1% in October 2012 from the previous month, and another sign: The measure of home-builder confidence jumped in November to its highest level since 2006.
Sales of existing homes rose to a seasonally adjusted annual rate of 4.79 million last month, which is up from a revised 4.69 million rate in September. Sales were up 10.9% in October from a year earlier, another positive sign. And stronger demand helped push up the medium house price nationwide to $178,600 in October, an increase of 11.1%. And while national statistics reflect a “national trend”, we are really focused on the strength of our West Los Angeles markets, which are slowly returning to 2007 levels.
One of the trends that is happening nationally is happening here, too — less inventory and fewer quality homes. According to the NAR, fewer houses on the market are helping drive up home prices. There were 2.14 million existing homes for sale in October, down 1.4% from September, which translates to a 5.4-month supply at the current sales rate, the lowest level since February 2006 according to the NAR. Sales by distressed homeowners still accounted for a larger portion of the activity. Foreclosures and short sales made up 24% of October’s sales — which is still a huge #,Ā the same level as September 2012 but down 28% from a year earlier.
Certainly, Super Storm Sandy caused havoc on the East Coast, and we’re fortunate we don’t have to deal with hurricanes in California — but, as you well know, we have fires, earthquakes and floods….so we’re not immune to disaster.
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Let’s hear it for the economy. Give me an “E”; give me a “C”…….
I’m normally not the cheerleader type, but when I see good news on the economy besides a one-week uptick in the stock market, positive thoughts begin to sweep over me and I’m thinking…’perhaps we are turning the corner?” “Perhaps” is always a trusting word — gives you an out if you need one — but as you are reading in this issue of the Schiffer Line as well as through the media,Ā there really is good news regarding the housing market — lowest interest rates in decades….consumer confidence up….declining # of homes underwater. But one of the most significant “confidence boosters” is happening with your local retailers or on your computer — holiday spending is up across the board.
But what is not surprising or perhaps it is — Cyber Monday, the “Monday” after Thanksgiving, proved that online shoppers are spending more than shoppers over Thanksgiving in retail stores for a one-day comparison. The average spend for the 129 million online shoppers for Cyber Monday was $194.46 vs. $172.42 average for the record 247 million shoppers who stormed their local retailer on Black Friday. Online shopping was up 28% and it was a record. Cyber Monday shoppers stocked up on clothing, electronics and books, CDs, DVDs, videos and video games.
Total spending for the Thanksgiving weekend was $59.1 billion, and the average shopper over the weekend spent $423 vs. $398 last year.
The indications are that retailers — both online and in brick/mortar stores — are happy to see consumer confidence back. And what the National Retail Federation revealed is that nearly 80% of shoppers took advantage of non-gift promotions. The NRF stated the obvious: Consumers love a bargain and will do practically anything to take advantage of deep discounts….more than 28% of shoppers were at their shopping destination by midnight on Thanksgiving!
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Fixed mortgage rates fall to record lows…..Good news for buyers and sellers.
Buying and selling a home just got a little easier as the mortgage giant, Freddie Mac announced that the average rate on a 30-year loan was 3.31%, the lowest since 1971, over 40 years ago. This rate is down from last week’s 3.34%.
The average for a 15-year loan was 2.63%, down from last week’s 2.65%, which also set a record — a year ago, it averaged 3.30%. Now that’s really low!
“Fixed mortgage rates continue to ease somewhat this week,” according to Frank Nothaft, vice president and chief economist at Freddie Mac. “These rates should help the ongoing housing recovery,” he said.
New construction and home sales are also rising, as I have noted elsewhere in The SchifferLine — construction was up 3.6% in October — the strongest showing since July 2008, and sales of existing homes increased 2.1% in October, exceeding forecasts.
So why be concerned about new home construction trends since most of the housing on the Westside is in existing homes? The answer is simple: The housing market is a combination of both new and existing home sales — it is better when both elements of the housing market are trending upward, as they are today, than to have one up, one down. This all affects consumer confidence and hence, spending and purchasing large items, such as a home, new or used. The lower mortgage rates contributes to rising consumer confidence and it also encourages more people to refinance, usually leading to lower monthly payments and more consumer spending, which drives an estimated 70% of economic activity.
So, we are all in this together!! We have already seen an increase in holiday shopping in retail and online, which all goes into our economic recovery mix. Lower mortgage rates for 30- or 15-year loans augur well for a better year ahead. And while you can’t put that “under your tree”, hopefully Santa will keep our rates low for next year.
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There is good news in bad news….negative equity declines with rising prices
Yup, you heard it here: There is good news in the fact that we have less bad news than we had last month! The good news: Rising home prices are helping trim the ranks of underwater homeowners in Los Angeles and Orange counties. The bad news: There are still an estimated 438,012 homeowners underwater in LA and Orange counties in 2012 third quarter (through September 30). A home underwater is defined as when the outstanding debt on the property is more than what the current value.
While the total of homes with mortgages underwater is still high — some 25.9% — that is still down from the second quarter of 28.9% of homes underwater. That may not sound like a big deal — unless you’re one of the homeowners whose home is worth less than the balance of your current mortgage.
Combined with the lower mortgage rates as noted above, we are seeing a stronger market in terms of volume than a few months ago, but prices are still slowly edging upward, but we’re still a long way from 2007 levels.
Suffice it to say, that all of this good economic news (lower mortgage rates, higher consumer confidence, and higher retail spending) portends stronger support levels for higher home prices. And when you factor in the lower inventory levels than what we have experienced in the four communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood — we can expect to see prices rise. I’m seeing more and more homes receivingĀ multiple offers — a clear indicator that we just don’t have enough quality inventory on the Westside.Ā It also demonstrates the importance of properly pricing your property when you put it on the market.Ā Even with the shortage of inventory that we are experiencing, if your property is overpriced, it will continue to sit there with no offers while other similar properly priced properties are selling! Ā
Yes, we have homeowners in these four communities who are underwater, and well, we just have to wait it out. Prices will eventually return to higher levels of the mid-2000s, and then hopefully, homeowners will be motivated to sell and inventory will increase, prices will rise even more so. Because we live in one of the greatest areas on the Planet, there will always be demand for homes in our neighborhoods. At the end of our real estate “day” — it’s all about supply and demand. We have demand. But not enough supply. Something good will come of this!
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Growing a moustache can be good for someone else’s health
My brother-in-law Bob and my nephew, Connor, took a big step to raise awareness and funds for fighting prostate cancer — growing a moustache for the month of November for the Canadian arm of the worldwide organization “Movember”. Movember garners millions through its 25+ member country organizations during the 30 days of November each year — and has raised nearly $90 million for raising awareness of prostate cancer and male mental health. Will they shave off their moustaches come December 1 — there are indications they might keep them for the future, but we’ll see (for sure!). I will let you after I see them for the holidays!
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Good Reasons Why You Should Sell Your Home During the Holidays!
1. More serious buyersĀ Ā 2. Less inventory for the serious buyers to choose from.Ā Ā 3. Festive feel to decorated homes. 4. Inventory increases after the holidays which can create a lower demand for your home. 5. Buyers may be more emotional during the holiday season. 6. Buyers potentially have more time to look at your home.Ā 7.Ā You can possibly extend the close of escrow to accommodate your holiday plans, etc. 8. Many buyers need/want to take advantage of year āend tax benefits. 9.Ā LESS COMPETITION!!!
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Organic food labeling terms ā what do they mean?
Most people who buy organic foods are happy to pay a premium price to ensure what they are eating is free of artificial preservatives and additives and has been produced in an earth friendly way.
Not only are consumers being misled, some organic food labeling is also impacting producers who have invested so much time, effort and money into making their produce truly organic by allowing inferior products to share the organic limelight and compete for market share.
In some regions, the term organic has become a little diluted; itās really a form of green washing.
For example, in the USA, products labeled āorganicā can contain 5% non-agricultural substances approved by the USDA. These approved substances are supposedly not commercially available in organic form, and some are questionable in terms of health and environmental issues.
It really pays to not only read labels, but then to find out what is stated on the label actually means. The following are brief summaries of organic labeling guidelines in various countries.
USA organic food labeling guidelines
100% organic ā must contain (excluding water and salt) only organically produced ingredients and processing aids. The USDA seal may appear on the packaging, but it must detail the certifying agency.
Organic ā must consist of at least 95 percent organically produced ingredients (excluding water and salt). Any remaining product ingredients must consist of nonagricultural substances approved on the National List including specific non-organically produced agricultural products that are not commercially available in organic form. The USDA seal may appear on the packaging.
Made with organic ingredients ā must contain at least 70 percent organic ingredients and list up to three of the organic ingredients or food groups on the principal display panel. The USDA seal cannot be used anywhere on the package
Processed products that contain less than 70 percent organic ingredients cannot use the term organic anywhere on the *principal* display panel. However, they may identify the specific ingredients that are organically produced on the ingredients statement on the information panel. The USDA seal cannot be used anywhere on the package.
Products using any of the above cannot be produced using excluded methods, sewage sludge, or ionizing radiation. The certifying agent seal or mark may be used on the principal display panel.
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While we all stop to catch our breath and enjoy all of the parties, events, celebrating the holiday season, I want to thank each and every one of you and to wish you a wonderful Hanukkah, Christmas and Kwanzaa and New Year! Ā
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