Timely Real Estate News……………………….1 February 2016
Pending homes sales unchanged according to NAR
Fueled by a large increase in home sales in the Northeast that outpaced declines in the other three major regions the report which was released January 28, by the National Association of Realtors (NAR), stated that pending home sales were mostly unchanged in December, but inched forward slightly. “This is a key indicator for our real estate market,” Carole Schiffer stated. “We always look to see what is in the pipeline, and it is very useful in helping me forecast what the condition of the market is going to be in the future.” “Particularly when I am meeting with sellers and we are discussing the pricing of their home or buyers as to what they should offer on a home”.
The Pending Home Sales Index — a forward-looking indicator based on contract signings, crawled 0.1 percent to 106.8 in December from a downwardly revised 106.7 in November and is now 4.2 percent above December 2014 (102.5). The index has increased year-over-year for 16 consecutive months.
“Overall,” Lawrence Yun Chief Economist for the NAR stated, “while sustained job creation is spurring more activity compared to a year ago, the ability to find available homes in affordable price ranges is difficult for buyers in many job creating areas. Yun continued, with home-building still grossly inadequate, steady price appreciation and tight supply conditions aren’t going away any time soon.” Existing-homes sales this year are forecast to be around 5.34 million, an increase of 1.5 percent from 2015.
Although healthy labor market conditions will persuade more prospective buyers to jump into the market, it is possible overall demand could be somewhat curtailed in coming months. The stock market’s losses since the start of the year and the effect slowing manufacturing activity is having in some areas — especially in the energy sector — could cause some to hold off on buying. Yun also stated that mortgage rates have declined in recent weeks, so “that’s a good sign. Buyers looking to close on a home before the spring buying season begins may be rewarded with a mortgage rate at or below 4 percent.”
Luxury-priced homes hit new highs in wealthy areas
In a report from one of America’s most respected real estate data-trackers, prices show no signs of slowing in rich enclaves such as the Beverly Hills, the Hamptons, and Aspen, suggesting that the global market situation has yet to spread to top trophy homes.
According to sales data in this report, the median sales price in Beverly Hills for a single family home jumped 54 percent in the fourth quarter over the same period last year, to $5.5 million. In Aspen, the median single-family home price increased 35 percent to $6.7 million and 2015 was the market’s best year ever for sales. On this note, however, I want to point out that in the last issue of the SchifferLine, median sales prices for Beverly Hills in December 2015 were 18% over the previous year’s growth — we do not track sales on a quarterly basis, and as I have said many times, a few large sales, particularly private sales as was the case in both Beverly Hills and Brentwood, always skew the stats.
In the Hamptons, a record number of homes sold for more than $5 million and more than $10 million in the fourth quarter.
“There’s a general perception that the luxury market across the U.S. is weaker than the middle or lower end,” said Jonathan Miller, president of Miller Samuel, the appraisal firm. “But in the most highly regarded areas, like Beverly Hills, the market is strong.”
It is important to note that sales figures for the final quarter (or month) of 2015 was just beginning to show the lagging impact of the deteriorating China economy and the oil price slide, as a result these numbers actually do not reflect what might be the current condition for January.
“I review each of these communities on the Westside that I report on (Beverly Hills, BH Post Office, Bel-Air, Brentwood and Westwood/Century City) every month after we receive the most accurate data we have from the Multiple Listing Service as well as the reports from the title company which enables me to also factor any private sales that took place,” Carole Schiffer stated. “And what we have found over time is that national data tracking services use their own matrixes and collection methods for reporting on area sales and pricing information. So, please remember that when you are reading these national stories, such is in the Los Angeles Times, real estate prices and sales volumes may vary greatly from what we consider to be a statistical, cohesive community figure.”
One interesting note from this report was the fact that the increases in sales volume (and prices) have come in the latter part of the year — not during the traditional strong selling season — Spring through Summer — which means the demand for luxury housing is increasing in a non-traditional period. The myth that real estate slows down in the fall and early winter has faded according to Carole Schiffer.
On the California front, according to results from the Standard & Poor’s/Case-Shiller index recently released, home prices in Los Angeles and Orange counties jumped 6.2% in November compared with a year earlier, and prices in San Francisco kept soaring. The Southern California numbers are higher than the national increase of 5.3%. The numbers from L.A. and Orange counties were also up 0.3% compared to October.
Analysts said the gains were helped by an improving labor market and low mortgage rates. However, they said housing is not large enough to offset several weak spots in the economy, such as struggling business in the oil and energy sectors and a slowing market for exports because of a stronger U.S. dollar. Case-Shiller numbers are widely considered to be the most reliable reading on home values, though they lag behind other indicators as I have indicated above.
It’s the economy, stupid. Politics aside, economy slows down
While politics are heating up across America, the economy is cooling. Latest GDP numbers showed that the economy grew at 0.07% for the final 2015 quarter, nothing really to write home about since the GDP figures for the third quarter came in at 2%. A disappointment!
As expected, Fed officials held their benchmark short-term interest rate steady at between 0.25% and 0.5% after enacting the first increase in nearly a decade last month. They offered no new hints as to when the next rate change would take place. While the housing market appears to be in a recovery mode, the weaker parts of our economy analysts noted is the price of oil and the China “syndrome” — two key factors in the lower growth performance. Interest rates remain constant, and our mortgage lenders indicate that even with the Fed rate increase, interest rates will be gradual.
So, let’s talk “hot zip codes”….some are hotter than others
Yes, Virginia, there are zip codes that are ‘hotter’ than others. In a recent Los Angeles Times article identified the hottest zip codes in Los Angeles County. If you lived in the Los Angeles County communities of Santa Monica, Hermosa Beach, Manhattan Beach, Marina del Rey, or Playa Vista you can now call yourself “hot”. Here are a few highlights:
Santa Monica (90402) — The classy neighborhood north of Montana Avenue saw the largest gain last year. At $1,420 a square foot, that’s the equivalent of $2.84 million for a 2,000-square-foot house. Known for larger homes than other city neighborhoods, the area has long attracted those looking for a hip and cool living environment near the beach. More recently, the neighborhood has grown even more exclusive amid a surge of international buyers and executives from the growing Silicon Beach tech hub.
Hermosa Beach (90254) — Strong demand, tight inventory, good schools and a view of the Pacific made Hermosa Beach a real estate standout in 2015. The small South Bay town also has something else going for it: It’s not Manhattan Beach. Wealthy families — priced out of increasingly pricy Manhattan Beach — are looking to the next town over.
Marina del Rey (90292) — Think: “Silicon Beach”! This is another beachfront neighborhood, another tech story. The flourishing online businesses that have created a wealth of jobs in nearby Santa Monica, Venice and Playa Vista are having an immediate impact on housing prices. New restaurants and stores are opening; the county is planning a massive renovation of its maritime, entertainment and hospitality attractions; and housing developers have projects in the works. Having a 6,000-boat marina at your doorstep ain’t too shabby either.
Manhattan Beach (90266) — Manhattan Beach long ago lost its reputation as a sleepy beach town. Professional athletes, tech executives, Hollywood types and other high-income earners are drawn to this city by its beach lifestyle, good schools and gourmet restaurants. But buyers on the hunt for a home find all that competition means there are few properties for sale and and for the most part are at top prices. The median price for an existing single-family home hit $2.1 million last year, up 10.1%. The median price per square foot grew about twice as fast to $1,021. With the “Los Angeles Rams” coming home and playing in Inglewood, look for increases in all of the South Bay communities. “There are going to be a lot of personnel to house, and I am not talking only about the players, but in some cases, the entire staff, as well, said Carole Schiffer.”
Playa del Rey (90293) — Real estate in this relatively low-key beach-side neighborhood at the end of Culver Boulevard is red hot. The culprits? Strong job growth and a dearth of homes for sale, and again the return of the Rams and their proximity to Inglewood and the Coliseum. In particular, demand has been heavy from workers in the growing technology and advertising hubs of nearby Playa Vista (again — Silicon Beach). In some cases, prices — at least on a nominal basis — have risen past those seen during last decade’s housing bubble, and is one of the few communities on the Westside and the South Bay to do so. Since we do not know yet where the training facilities for the Rams will be, the vote is out as to where everyone will eventually settle.
911 calls on landline or cell phone treated differently
You need to know what happens with your 911 calls. In the City of Los Angeles, 9-1-1 remains the single quickest and most efficient way to summon the immediate emergency assistance of police, firefighters and paramedics. First and foremost, it is always preferable to find a landline from which to call 9-1-1.
When calls to 9-1-1 are placed via a landline, the caller’s location is immediately captured. The dispatcher also receives other important information like callers callback number, major cross streets and nearest fire station. If the caller hangs up or the call is otherwise interrupted, the 9-1-1 operator can still dispatch resources.
When calling from a cell phone, the call is routed to the California Highway Patrol (CHP). (This dispatch center handles all incoming cell phone 9-1-1 calls originating in Los Angeles City & County.) Cell phone calls can simply take longer to activate because of this. There are many 9-1-1 call management issues that can affect dispatch times and resources.
What is my perspective as I am seeing real estate activity?
One would think with the highs and lows of the stock market and the speculation of the viability of the world economy and the political environment we are with the Presidential election being held at the end of the year, it would potentially have a negative impact on the local real estate market. I can honestly tell you I am not seeing anything like that. For the past few months or so, I have had four (4) escrows running that at one time or another were all in some state of distress, and in one case the “patient was on life support, and unfortunately did not survive”! But it has been busy. I was very busy with showings all through the holidays and when the 4th of the transactions fell apart, and we put the property back on the market. I am getting activity, which is always a good thing. I am working with some sellers, buyers, and lessors, and in the next month or so, will have some new listings to share with you, but in the interim, please do check out my listing at 2260 The Terrace in Mountaingate, which is a really excellent buy for an owner user and visit my web site, www.caroleschiffer.com and/or my Facebook page http://www.facebook.com/CaroleSchifferRealtor.
Please let me know how I can assist you with any of your real estate needs.