Timely Real Estate News……………………………………….I February 2018
**********************************************************A deadly string of fires, rains, and then mudslides
Through the late summer and fall, Southern California faced down fires that devastated thousands of acres, destroyed hundreds of homes, and cost a severe loss of life. We are still digging out from this devastation while thousands have been displaced and many remain unable to get back to their homes, and may find they have no home to get back into. Twenty people alone lost their lives to mudslides in Montecito. For many who experienced the raging floods flowing down from the hillsides above, many also thought they would be survivable. But they were tragically wrong.
The case Montecito residents will be making is the mudslides wouldn’t have happened, or been so severe, if not for the catastrophic Thomas fire, which scorched nearly 300,000 acres last month, now the largest in California’s history. But one of the thorniest issues will be how insurance companies treat claims with respect to mudslide damage. Most homeowner policies do not cover flood damage, which would include some mudslides, even if you have flood insurance. You would need supplementary coverage for that. Typical home insurance plans cover fire-related damage and as reported in the Los Angeles Times last week, Montecito homeowners will try to connect the fire carnage to the mudslide aftermath, but as noted that argument will be an open question in the courts.
Nearly all homeowner policies exclude coverage for earthquakes, landslides and other instances of the ground going places. Supplementary coverage, such as earthquake insurance, is available, but it’s pricey. Only about 10% of California homeowners are covered for earthquakes. I cannot suggest strongly enough the need for you to obtain earthquake insurance. The cost of the premiums are down, and with the recent discovery of the fault going through Rodeo Drive, and frequency of earthquakes, it really only a matter of time before we experience “the big one”! Please make sure you are prepared.
Also, please take time to review your home owner’s insurance policies, and check to see what your policy actually covers with respect to fires, floods, and mudslides.
High-end sales on the Westside “…it was an amazing year!”
2017 was the best year ever for high-end sales — those homes selling for more than $5 million. There was a total of 602 closed escrows of homes selling for more than $5 million versus 514 sales in 2016, a 17% increase. Specifically, there were 184 closed sales of $10 million-plus homes in 2017 versus 160 in 2016. Of these, there were 52 closed
sales of $20 million-plus homes in 2017 versus 33 in 2016. Nine of these sales were $40 million-plus versus only four in 2016.
The buyers came from America (38), China (4), U.K. (4), South Africa (2), and one each from Indonesia, Scotland, France, and Canada.
As noted in the January 15th edition of the Schiffer Line., we have surpassed 2016 sales volume by more than 10%. I anticipate that our sales volume and median sales prices will continue upward as inventory lags behind demand in our marketplace.
Here are 5 home renovations that can be a waste of money
According to Remodeling Magazine’s 2017 “Cost vs. Value” report, there are many ways to spend money on home improvements but the report throws cold water on what many of us assumed were smart investments. So, let me summarize the top five “best ways” to spend your money properly…. It really depends on what your goals/values are… if you are in the house for the long haul then by all means “go for it”, but if your intent is to do some work and put the house on the market, then you probably want to rethink what work you are planning to do. Many times, I have found that unless the area/room is really horrible, you are much better off pricing the house accordingly to reflect that the buyer will want to do some work anyway, and then let them do what they want. Give the buyer a credit to use as they wish. They will appreciate it!
1) Kitchen remodels — this is a tough one because most of us want ‘super kitchens’ and are willing to spend whatever it takes. The report shows that kitchen remodels attain less than 2/3’s of the cost in the revised value, and for higher-valued homes, it is even less…2) Luxury or universal bathroom updates — Many think new bathrooms are what buyers want to see…but research says that smaller, more cost-effective updates like updating hardware and repainting cabinets will be just enough to entice buyers. But again, you’ll only get about 2/3’s of your money back when you sell.
3) Repainting roof or cosmetic treatments — Rest assured, if you don’t actually replace the entire roof, poor surface treatments will not work and will actually discourage a purchase…4) Landscaping to the “nines” — Presentation is always essential and buyers want to see manicured lawns and flower beds, but do not want to see a lot of hedges and high-maintenance sections that scream money and time. Don’t remove trees — buyers love trees and the shade they bring…and 5) Adding rooms — you can spend upwards of $100,000 in adding a room, and you’ll only get back less than 70% of that when you sell. It may make your life easier and may entice buyers, but it won’t generate a profit over the cost of doing it.
If you must, the “Cost vs. Value” report states that you should sit back, relax, improve your home with paint, perhaps new fixtures, clean up the yard, but don’t go overboard thinking you are going to turn a nice profit on your home improvements. If you want home improvements, do it for yourselves, not the buyer.
Is it over? We’re closing the foreclosure gap….
After the Great Recession, the U.S. faced an onslaught of foreclosures, especially in states such as California, Nevada, Arizona and Florida where home equities dropped by as much as 75% in one year. Along Interstate 5, from Modesto south, communities faced devastating abandonment of homes, shopping centers, and schools and homeowners saw up to 75% of their equity disappear.
As of the end of 2017, foreclosure filings were submitted on 676,535 U.S. properties — a 27% year-over-year decline and the lowest level since 2005. The filings, which included default notices, scheduled auctions and bank repossessions, accounted for 0.51% of all housing units, down 0.19 percentage points from 2016 (0.70). It’s also the lowest % of filings seen since peaking in 2010 (2.23%).
Foreclosures will always be with us, of course, but it is good to see equities being replenished. Up and down the State of California, we are seeing homes being built again, homes values and prices near their 2007 peak levels again.
In Los Angeles County, we have surpassed the record high before the Great Recession. One caveat, however is that we’re still behind when you are factoring in 13% inflation over this period (2007-2017) …but we’re heading in the right direction.
“Changes in our skyline” — LA’s new developments
Two new developments have been announced to change LA’s skyline as well as the way it delivers the arts to the community. Los Angeles’s signature brands— Frank Gehry and LACMA — have separately announced plans that will have some profound changes in the City.
Gehry’s Grand Avenue project, which has been floating around design and planning offices for the past 10 years, is set to begin construction this fall. The project, now called The Grand, will bring shops, a movie theater, and a 20-story, 314-room Equinox hotel to the parcel at First and Grand, now occupied by parking structure. The development will include a 39-story tower with 123 condos and 323 apartments. 20% of the apartments will be available for low income tenants, who will pay subsidized rents.
The developer is Related Companies of California and the new development will be facing Walt Disney Concert Hall. The Gehry-designed complex will feature a box-design that will become the largest development on the east side of downtown near the Music Center and Disney Hall complex.
LACMA announced plans to expand beyond its mid-Wilshire campus to create a satellite campus, or possibly two, in South Los Angeles, the area once known as South Central but was re-branded 15 years ago because of crime and riots.
The goal is to provide museum experiences for the underserved representing the neediest students all through South Los Angeles. Funding for the expansion has yet to be finalized.
First things first. Did you get to the Town Hall meeting on the 21st of January at Skirball re the Berggruen Institute? It was very interesting. Besides the interesting and in some cases compelling information that was shared, I learned that the approval for Institute is “not a done deal” which is what I thought was the case. There will be more public hearings on this very critical issue for the entire Westside of Los Angeles!
Real Estate News – The market is moving, but I have found that at the higher end, it is a little slower than it has been. It appears that people are trying to take a measure of the new tax bill and its impact on them. Recently I was at an open house in Santa Monica for a lovely craftsman and it was very busy. They were expecting multiple offers on this property that is in the mid $3,000,000 price range, and one of my associates has a client for condo in the San Fernando Valley, and she was saying that the people attending open houses are literally wall to wall and condos in the $300 ,000 price range are selling in 1 day!
Stay tuned for some of my new listings that will be coming up in the next few weeks!
Happy Valentine’s Day….
Please, don’t forget that special someone in your life…and yes, it’s the thought that counts, of course…and there are lovely cards that can express your loving thoughts, too. Put a smile on someone’s face!
Happy Valentine’s from Carole!
Carole Schiffer, Realtor Coldwell-Banker Residential Brokerage/Brentwood Office
310-442-1384 (office) or e-mail me at email@example.com www.caroleschiffer.com
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