SchifferLine 1 February 2014 | SchifferLine

Timely Real Estate News………………………………………………….1 February 2014
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Happy Valentine’s Day

I hope you have a wonderful day!

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In addition to the water drought we also have another one to think about…..real estate inventory drought!

Let me be very frank with you: As you know we are suffering from a drought because the shortage of rain, the drought we are having with real estate inventory it is almost as bad. Supply is down. Demand is up.

What to do? This inventory drought offers some opportunities for both buyers and sellers.

One of the biggest questions I always face with my clients is: Buy or sell now? The answer is YES!

It is a good time to buy and sell — you need a Game Plan!

Buyers put on your game face
Why is that? If you know the real estate market, you know that we always have high demand for quality inventory. This is as true today as it has always been. There are buyers out there who have cash or are pre-qualified who can make a deal on the spot. These buyers are anxious to avoid the competition and buy a house NOW! Since you will most likely be facing some competition on the property you wish to buy, there are many things buyers can do. Here are some quick tips.

•    Secure a knowledgeable, experience realtor who knows the market and can guide you through the entire buying process
•    Know where you want to live, what you can afford, what your needs are, and what you want to buy.
•    Be prepared to focus on the neighborhood (location) of your choice and identify the price that best meets your financial profile
•    Be pre-approved. Do not even attempt to start the “shopping process” unless you have been pre-approved for a loan that fits your dream home parameters.
•    Be ready to make an offer. In this market, timing is everything, especially when inventories are down and there are anxious buyers. Because there are a number of buyers that are also looking, you might be involved in a multiple-offer situation, and you need a strong realtor to navigate through this process. I do this all the time, and you must be committed to ‘stay in the game’. You need to be the strongest buyer you can be… what does that mean???? Good Credit, Big Down Payment or Pay Cash, Be Prepared to show the Seller that ability by providing proof of funds with your offer.

Many times, buyers will be worn out if they find themselves in a competitive situation (multiple offers), and will tend to give up or withdraw entirely.

Fortunately, Coldwell Banker — being the #1 residential broker in the West Los Angeles market, has many programs that give us a leg up on competitors….such as our “early alert” program called Quick View, which we get every day. My job is to stay on top of every possible option for my buyers. Essentially, I have one of the best networks on the Westside and am always in the “new listing” loop.

Caution: If you really don’t know exactly what you want or where you want to live, working with an experience agent who can show you properties in various areas will enable to you to focus on what and where you want to be. My experience tells me that you must be focused, motivated, and ready. I had one buyer who visited many, many homes.
She did have a very specific “feeling” she wanted to experience that would be her “perfect house.” On the last day of our search, I was down to the last on the list….and she stepped inside the house, and said, “This is it!” And then she started to cry. She knew exactly what she wanted….and fortunately, we found it.

Sellers — have your Game Plan, too
It isn’t always an easy decision to put your home on the market. I can’t think of a time when I would put my own home up for sale because I have been there for 20 years….I love it…and it’s “home”, pure and simple. So I am very empathetic with sellers who can’t always make up their minds quickly. The process can go on for years….I’m very, very patient.

There are challenges, too, for sellers, even in a low-inventory market. And sellers need a game plan, too. Here are some tips for sellers:

•    Make sure you have a game plan in place with your realtor. Pick a realtor who really knows your neighborhood who can take you through the entire selling process
•    Again, price is going to be one of the deciding factors on how buyers respond. Even with the low inventory we are currently facing, if your price is too high, you could sit for months on the market without any offers. Be realistic about pricing your home — it’s going to the #1 focal point in the selling process
•    Presentation — make sure your home and property is not only in first-class condition, but be very conscious that the better the presentation, the better price you’re going to get. Remember, approximately 80% of the buyer’s today shop on line before they actually start looking at a house and nearly 50% of buyers will maketheir decision about making an offer on your home before they get out of the car….”curb appeal”….but don’t leave it to that.
•    Be committed. Just because you put a “For Sale” sign on your property does it mean you’re a committed seller? Too often, sellers can be just like uncommitted buyers — they like the “idea” of selling their home, but they’re really not ready to move. They don’t know where they want to move when they sell….they just want to
“test” the market….and when a serious offer comes their way, they cannot make a decision. These are not “sellers”.
•    Be ready. That’s the key to the entire process. If you’re committed, you are in the “game” to the end. ….take the good advice of your realtor….and stay the course.

Unwilling and not-so-serious sellers have some of these traits;they want too much money for their house….they won’t reduce the price even though the market is telling them that “it’s just too high”…..they don’t like to make the effort to get their home ready for showings…and so on. These sellers can sit on an over-priced home for months…take it off the market…and realize that they have lost their window of opportunity, thinking the market is going to change.

In summary, let me say “this is now a great time to buy and sell”. There is less competition out there — for buyers, there are fewer buyers at this time than they will be in a few months….for sellers, there are fewer homes on the market. Loan rates are not going down right now….but they may be going up. Call me for an opinion….the “doctor is in!”

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Existing-home sales edged up in December…..

There was a bit of good news last week — existing-home sales for December and sales for all of 2013 were the highest since 2006 — and median prices maintained strong growth according to the National Association of Realtors. We have seen similar trends on the Westside, and this just confirms what we are seeing in the four communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air, and Brentwood.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.0 percent to a seasonally adjusted annual rate of 4.87 million in December from a downwardly revised 4.82 million in November, but are 0.6 percent below the 4.90 million-unit level in December 2012.

Our friendly NAR chief economist, Lawrence Yun, said housing has experienced a healthy recovery over the past two years. “Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” he said. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”

As I have stated in the SchifferLine, we are beginning to see signs that we are trending toward a “normal” market — one that is not fraught with big swings in sale prices or volume. We achieved modest sales growth in 2013 over 2012.

It was interesting to note that only 10 percent of December sales were foreclosures, and 4 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in December, while short sales were discounted 13 percent. The median for time on market (Days on Market in our SchifferLine) was 72 days in December, up sharply from November 2013 of 56 days. Short sales were on the market for a median of 122 days in December.
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Don’t show this to my wife, please! $100 million apartment stuns

Here is the story which takes place in New York City. At 50 UN — the ultimate living space anywhere on the planet according to those who have seen the ‘apartments’. According to the article in Departures, December 2013, when the building was topped out in July 2013, there were two apartments for sale — a $55 million duplex and a $45 million full-floor penthouse below it. The developer mentioned that you could combine all three into a tri-plex.
According to the Departures article, an American tycoon who was owner of a professional sports team, several
companies, and other homes dotted around the country, was informed by his broker about the “opportunity” to view anewer, better apartment then he currently owned. As he walks around the house, he starts hyperventilating….”it’s
breathless. The most beautiful thing I have ever seen,” he gasps. But in an instant, he looks stricken. “What’s the
problem?” “Oh, my God,” says the client, “Do not show this to my wife. If you show her, I’ll have to buy it.”

The stories of the super rich literally gobbling up these super expensive apartments and condominiums (or co-ops) are not rare anymore. Prices are not uncommon in the $50-90 million range in New York City, and there have been many sales in this price range. The $100 million price tag, however, is unique. Foreign buyers with lots of cash (and assets) are now gazing over the entire City and looking down on New York’s Central Park or across the East or Hudson Rivers….

What amenities are in these super living quarters? Where once trophy finishes such as doors, cabinets, hardware and appliances were just adequate, now developers “have to provide impeccable custom touches,” says Related Companies vice president Michael Iannacone, who is selling One Madison, a new tower at the bottom of Madison Avenue. Its $50 million triplex penthouse boasts a double-height great room with a curving glass-and-nickel staircase, a wraparound terrace and a private elevator. At Walker Tower, radiant-heated floors, a Smallbone kitchen and a museum-quality zoned humidification system for art protection are among each unit’s defining features. “It all sets us apart,” says Walker’s Michael Stern, who realizes he must be student as well as teacher. “We have to know what will people ask for next?”

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Good news on the commercial development front….

The latest Allen Matkins/UCLA Anderson Forecast Commercial Real Estate Survey signaled there is continued optimism among developers – a slight increase in confidence across commercial real estate submarkets since the survey was last conducted in June 2013. The biannual survey projects a three-year-ahead outlook for the state’s commercial real estate industry and forecasts potential opportunities and challenges affecting office, industrial and
multi-family sectors. It is no secret that many of my clients are invested in commercial real estate in Southern California (and beyond), so this is a welcome sign.

The November 2013 results show a positive outlook across all markets for the first time since the Survey’s inception in 2007. Clear economic improvement is generating new opportunities for profitable investment in office and industrial space across the state. According to surveyed industry leaders, developers in all areas (with the exception of the Bay Area’s industrial markets) expect to accelerate development activity, tightening the commercial real estate supply.

It’s the jobs! Certainly, we have been saying in the SchifferLine that job growth is fundamental to the future success of California’s economy. The increased optimism in many sectors can be tied specifically to job growth, especially along the coast, where jobs are being generated at a rate faster than the national average. The current expansion of employment is expected to continue into 2016.

Office Development Sentiment Positive With Southern California in Spotlight

The optimism for the office space market remains highest in Southern California, likely due to the increased rate of job growth in the region and a tightening of office space supply. Indeed, 70 percent of those surveyed in Southern California indicated that they would start one or more projects within the next 12 months. In the Bay Area the survey revealed renewed optimism regarding both office rental and occupancy rates through 2016. This comes on the heels of many new Bay Area projects already under construction, and is indicative of a return to healthy office construction in the region.

Industrial Sector Experiencing Increased Demand
There is also a strong outlook in the industrial markets for manufacturing and warehousing facilities that support California manufacturing, exports to Asia and Mexico, and consumer goods imported from Asia. With the emergence of the Eurozone and Japan from their recessions and the economic growth in China, there is an increased volume of trade though Southern California ports in particular, which may create an increased demand for warehouse space.

The Survey also noted that prospects for returns on multi-family housing investments in San Francisco and Silicon Valley during the coming three years look promising. All surveyed panelists in those markets, where occupancy rates are above 97 percent and rental rates are among the highest in the nation, indicated that they would begin projects within the next 12 months. About 65 percent of those surveyed in Los Angeles, where occupancy and rental rates are similar to those in Northern California, could begin new developments in the coming year.

Though construction permits for multi-family units have been rising significantly through November 2013 (the survey date) with an increase of 19.6 percent in Los Angeles, a 18.2 percent rise in San Francisco and an uptick of 44.2 percent in San Jose, indicate there may not be enough multi-family housing in late 2016 to affect the rise in rental and occupancy rates.
As a commercial real estate owner, I have been closely watching the trends — and this latest survey certainly signifies that our market is making the gradual improvements — it couldn’t come at a better time.

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PLEASE DO NOT FORGET FOR THOSE OF YOU WHO LIVE IN THE SEPULVEDA PASS.

In order to work on the new lanes, of the 405, the portion of the freeway from Moraga to Ventura Blvd. will be closed from the evening of the 14th February to the evening of the 16th. but Sepulveda Blvd will be open

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As always I look forward to hearing from you as to how I might assist you with any and all of your real estate needs. 310 442-1384 or carole@caroleschiffer.com

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