Timely Real Estate News……………………..1 February 2015
Happy Valentine’s Day!
It’s just around the corner (February 14, as always), so take this as a hint: Remember your loved ones on this very special day. Happy Valentine’s Day from me, too.
Home prices climbed in LA, Orange counties….
According to the well-regarded Case-Shiller Index, national stories in the Los Angeles Times and Wall Street Journal confirmed that home prices are on the increase around the nation by as much as 5 %. Some areas in the US are higher than others, of course, and that is the case here on the Westside. It is important to understand that these national tracking stories do not always reflect what is happening in the five communities I report on in The SchifferLine each month. But our home prices are, indeed, on the rise.
For example, median sales prices for all of 2014 showed that while Beverly Hills was down 7% in median sales prices compared to 2013, Beverly Hills Post Office was up 24%, Bel-Air was up 8%, Westwood/Century City was up 20% and Brentwood was up 11%. These are much stronger #s overall compared to national trends.
Research firm Core Logic Data Quick reported that the median home price in the six-county Southland rose 5.1% in December, the smallest 12-month gain since April 2012. Americans purchased more previously owned homes in December, but the increase was less than Wall Street expected. Existing-home sales climbed 2.4% from November to a seasonally adjusted annual rate of 5.04 million, the National Assn. of Realtors said Friday. According to Fact Set. Analysts predicted sales to rise to 5.05 million.
The housing market softened last year after home prices soared far faster than incomes in 2013. Many families, as well as investors, bowed out of the market as a result, sending sales in 2014 down 3.1% from a year earlier. The upcoming spring-buying season should provide insight into whether recent solid job growth and falling mortgage rates are enough to revive a sluggish housing recovery.
Lawrence Yun, the Realtors’ chief economist, said there were already signs of improvement in the second half of 2014 “once inventory increased, prices moderated and economic growth accelerated.”
Preservation….it’s all about “preserving”
We love our icons, especially unique architectural statements be it a restaurant, a bank building, an old Victorian home, or any building designed by one of the world’s great architects. Or so we thought. But, in my humble opinion Los Angeles has a history of getting confused as to what should be preserved and what shouldn’t. For example, the Los Angeles Times architecture critic, Christopher Hawthorne, was deeply concerned about the demolition of one of our most treasured author’s (Ray Bradbury) home in Cheviot Hills, the demolition of which was being directed by its new owner — LA architect Thom Mayne, who has the famous Pritzker Prize under his belt. It is probably torn down by now.
However, Hawthorne wasn’t so concerned about this house — it was not a distinctively designed home, but it was significant in that Bradbury lived there for more than 50 years where most of his famous novels were created. What he did point out that the now iconic-designed Norm’s restaurant was also slated for demolition, but the Los Angeles Conservancy added an alert to its website that the new owner of the 1957 Norms restaurant a “time capsule of the space-age LA coffee-shop style known as “Googie on La Cienega Boulevard was to be demolished. The Conservancy marshaled its forces and the demolition has been postponed for at least for 75 days.
It is very interesting to me.. Today I showed a home designed by Richard Neutra that has been built in 1936. It is for sale. The current owner has brought the services, electrical, plumbing, etc. up to 2015 standards and requirements, but from an architectural perspective has otherwise completely restored the house and it is FABULOUS. In looking at the house, one gets a great insight into how our life styles have changed. The public rooms are big, bright and airy, and the bedrooms are VERY small. We use our homes so very differently today, and that the same thing holds true for our public buildings. Hopefully we can find a middle ground and save some of the history of what makes Los Angeles such a great and beautiful city!
Enter Carroll Avenue. If you have never been to this tiny enclave of perfectly preserved Victorian houses in Angelino Heights — it’s worth the trip. Here you will discover Victorian-era homes within a very picturesque neighborhood that has served as a backdrop for many Hollywood movies. There are approximately 12 homes on Carroll Avenue that reflect the style, tastes, and glamour of that Victorian era. All of the homes are currently occupied, but it’s worth a “walk down memory lane”. I recommend you visit the website: www.laconservancy.org for the latest on what’s happening in preserving our city’s assets of the past.
Puzzled what to give for Valentine’s Day? Here’s an idea.
Why not give your Valentine the world’s most valuable chocolate — To’ak Chocolate bar — only $260 for a 50-gram bar. To’ak is made from the ultra exclusive process of picking only the rarest of cacao beans in the Ecuador rain forest from 100-plus-year-old Arriba cacao trees, the last of their kind. From these trees, come the most coveted cacao beans in the world. Through a unique, secret fermentation and roasting process, To’ak chocolate is made with the same precision and care that goes into making fine wine or distilling a small-batch of whiskey. And it takes two years to make the small production run of just 574 bars, which are sold in individual wooden boxes filled with cacao bean husks and numbered by harvest. According to Forbes.com, there is still some left.
What to do, Oh what to do???? Yellen and her challenges….a mixed bag
It is a common assumption that weak economic news normally causes money to flow out of stocks and into bonds, helping bonds and home loan rates improve. While on the other hand, strong economic news normally has the opposite results. So when you see bond prices moving higher, it means home loan rates are improving, and when they are moving lower, home loan rates are getting worse.
Of course, all of this impacts the lives and fortunes of buyers and sellers of residential properties — interest rates have been kept low during the past year, but as we have seen in recent days, interest rates are creeping up again. So this is the challenge that Federal Reserve Chairwoman Janet L. Yellen is facing, in her second year on the job.
Having earned high marks for steering the economy after her former boss, Ben Bernanke, left the post over a year ago, according to leading US economists Yellen has managed to navigate the economic waters fairly successfully. After winding down the central bank’s bond-buying stimulus without roiling financial markets, Yellen begins her second year on the job with the more difficult task of deciding when to start raising the Fed’s key interest rate, which has been near zero since late 2008. This has kept your mortgage rates low for much of last year. Her job has been complicated by something she has little control over: the troubled state of the global economy. Falling oil prices have created havoc with major oil exporters.
She and her Fed colleagues now must weigh improving economic growth at home against a slowdown in much of the rest of the world — a situation that has driven up the value of the dollar and is starting to crimp profits of American companies, particularly exporters. Thus throwing the economy and Yellen a curveball. While lower pump prices have provided Americans with more spending cash and revved up some businesses, they have hurt energy-producing states and added to the nation’s stubbornly low inflation, which can suppress workers’ salaries.
The global economy, however, has increasingly been creeping into the Fed discussions. With Europe barely treading water, Japan falling back into recession and the big Chinese economy slowing, forecasters have been reducing growth prospects for the global economy. The U.S. has been an outlier; its outlook has been upgraded in recent months.
One result of this divergent trend is that it has sharply boosted the value of the dollar. Against the euro from six months ago the dollar is up about 20%. And American companies are starting to grumble.
Apple Inc., Microsoft Corp. and Caterpillar Inc., among others, have warned that the rising dollar is eating into earnings. Sales in Euros look a lot smaller when converted into dollars. The impact can be even harder on American exporters because their products become more expensive in foreign markets.
Inflation is running well below the Fed’s 2% target, and the recent plunge in oil prices is adding to disinflationary pressures that are making central bankers around the world nervous. Canada and Singapore, whose economies are growing, were the latest to announce an easing of monetary policy in a move to keep inflation from slowing.
Ultra-low inflation could hurt growth, especially wages, and runs the risk of deflation, a dangerous condition of falling prices and wages. With a troubled global situation, Yellen has her hands full –but economists say that her focus is to watch out for the domestic economy first. So far, in most everyone’s opinion she’s done a great job at doing that.
As we sit on the sidelines and watch our US and global economies march into the New Year, we don’t see any drastic changes to mortgage rates as long as our US economy remains as strong and healthy as it has been in the past six months. Keep an eye on bond rates and how money is flowing into and out of the stock market. These key indicators will be a predictor of mortgage rates, something that affects us all in the real estate world.
Giving Back…. Please remember.. I will make a donation in your name to your favorite local charity at the close of every sale transaction. I look forward to us working together to make this happen!
My current world of real estate.
Currently I have two lovely listings. One is a great townhouse in The Terrace complex of Mountaingate. It is a 2 bedrooms/2 baths with a den. The thing that makes these units special is the height of the ceilings, which creates both drama and scale. In addition this is an end unit which adds light. We are asking $1,329,000. Please let me know if you would like to see this home. I am also representing a lease in Bel Air Crest. It is a charming 3 bedroom/2.5 bath home with its own pool. The kitchen is ready for you to come and create some great meals while you look out onto the garden. There is a small Romeo & Juliette balcony in the Master. We are asking $7,500. Both homes are vacant, are in 24 hour secured environments, and ready for you to call your own! Please check them out on my web site: www.caroleschiffer.com