The SchifferLine
Timely Real Estate News……………………..1 June 2021
***********************************************************
LA’s Westside high-end sales through the roof
Last year at this time, sales for homes $5 million-plus were screaming through the roof, but through the near-end of May 2021, sales were far surpassing last year’s record. There have been 404 closed sales of $5 million-plus homes so far this year vs. 187 at this time last year,, up 116 %. Of these, 151 were over $10 million-plus, and there were 54 at this time last year up 180%.
Thirty-three (33) of these were $20 million-plus vs. 13 at this time last year, up 154%. Of these, only 13 were not officially listed when they sold.
What is even more impressive is that there are more pending sales today than we have seen at any time in the past — 105 pending sales of $5 million-plus and 47 of these are $10 million-plus.
The buyers were mostly American — 25 — and the other buyers were from England, Saudi Arabia, China, India, Canada, Indonesia, and Brazil.
It is interesting to note that the highest sale was for a home previously owned by Kenny Rogers overlooking Paradise Cove in Malibu — it was relatively small, only 3,827 sq ft, built in 1968, but it sits on 2.97 acres overlooking the ocean. It was listed for $125 million and it sold for $87 million
***********************************************************
Pacific Palisades fires are a wake-up call for all of us
More than 1,300 acres burned in Pacific Palisades on May 14-15 according to the LA City Fire Department. Arson 
was the alleged cause, and a suspect was quickly apprehended after being spotted from a helicopter setting fires through the area above the Palisades. Another fire in Pacific Palisades was a two-acre brush fire on the cliffs above PCH on May 24, which was quickly extinguished.
It is fire season, folks. As I have reported many times in The Schiffer Line, our fire season lasts the full year, all 12 months. So please be aware of maintaining your property — clear brush and combustible materials near your home…and make sure you have the emergency supplies and a plan to escape on hand in case fire comes your way. We’re all in this together.
***********************************************************
Realtors predict robust economy for rest of 2021
After recording the quickest recovery in the nation’s history in the wake of the COVID-19 pandemic, the U.S. economy is expected to kick into higher gear in 2021 according to the National Association of Realtors (NAR). With the number of vaccinated Americans increasing and new coronavirus cases on the decline, NAR Chief Economist Lawrence Yun anticipates the economy will grow 4.5% in 2021.
“Consumers will begin to spend massive savings, and do more shopping, restaurant dining, traveling and in-person house hunting,” he said. While home sales continue to be an economic bright spot, unemployment remains an issue. Eight million jobs that were lost during the pandemic have not yet been recaptured.
Yun maintains that job recovery is taking longer due to some friction in the labor market, including workers being unable to return to their jobs, where work-from-home is not an option for many. Another component is that in some cases, job openings are going unfilled as some workers are finding it better financially to collect unemployment rather than a pay check. As economic growth strengthens, 4 million jobs are projected to be gained this year.
“As mortgage rates increase, the frenzied multiple-offer situation will become less prevalent by year’s end, as affordability challenges squeeze out some buyers and more inventory reaches the market,” Yun said.
Although the low supply of housing has played a significant role in home price surges, Yun expects more home construction, a growing willingness among homeowners to list properties due to an increase in vaccinations, and a gradual decline in mortgage forbearance.
***********************************************************
As U.S. home price growth surges, supply can’t keep up
March marked highest annual rate of price growth—13.2%—since December 2005, according to Case-Shiller index. Prices for new and previously owned U.S. homes are surging, as strong demand continues to overwhelm the housing supply.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 13.2% in the year that ended in March, up from a 12% annual rate the prior month. March marked the highest annual rate of price growth since December 2005.
The Commerce Department reported last week the median price of a new home sold in April was $372,400, up 20.1% from a year earlier, the strongest annual gain since 1988. The median sales price for existing homes rose 19.1% in April to $341,600, according to the NAR.
Robust home buying demand, driven by ultra-low mortgage interest rates, and a shortage of homes for sale have pushed prices rapidly higher in recent months. There were 1.07 million existing homes on the market at the end of March, down 28.2% from a year earlier.
***********************************************************
Southern California homes sales jump 20% in April…a ‘wow’
April home sales jumped 86.2% year over year with a total of 25,857 transactions, up from 13,889 in April 2020. Southern California home prices muscled to an all-time high in April as the hot real estate market got even hotter according to DQ News, a real estate data-tracking firm.
The six-county region’s median home price increased 20.2% year over year to a record $655,000, according to data released Tuesday by real estate firm DQNews. That is $25,000 more than the previous median price record set in March.
The large increase in home sales is both a reflection of the pandemic-fueled housing boom and of a market that was
chilled by the coronavirus last spring as sales fell out of escrow and would-be sellers decided not to move.
It is the ninth straight month of double-digit price increases, and experts credit a mix of factors including ultra-low mortgage rates, increasing demand for space and an emerging home-buying demographic: millennials.
Another contributor is the housing shortage: There is a glut of potential buyers but a shortage of sellers, and it is leading to bidding wars that drive offers far above the original price tag. In March, more than half of homes in Los Angeles fetched more than the seller was asking, according to the Multiple Listing Service.
***********************************************************
All-cash sales continue…not a fad
All-cash sales of existing homes comprised a quarter of transactions in April as competition in the housing market continued, according to the latest NAR Confidence Index Survey. This marks an increase from 15% of similar sales a year ago and 20% in 2019, the survey shows. Despite low mortgage rates, more buyers are bringing cash to make their offers stand out in a bidding war.
The uptick in cash buyers is most prominent among non-first-time buyers, comprising 33.5% of all-cash offers in April—up from 26.3% from April 2019, NAR’s survey shows. Only 6% of first-time buyers made an all-cash purchase in April.
The share of cash buyers among primary residence buyers also has climbed. In April 2018 and April 2019, only about 12% of primary residence buyers made an all-cash purchase. That share has since increased to 15% as of April of this year, the survey finds.
The share of all-cash sales among vacation homes also is increasing, jumping to 61% in April compared to 50% over recent years, the survey shows.
On the other hand, there hasn’t been a noticeable shift in the share of all-cash sales among buyers who are purchasing a property to rent it out. With low mortgage rates, home buyers who intend to rent out the property are taking advantage of low mortgage rates to finance the acquisition of the property.
*********************************************************
Half of homes sell above list price, true story
Home buyers are facing relentless competition in the housing market, driven by low mortgage rates and inventory. Based on real estate transactions nationwide in March, practitioners report an average of five offers on their most recent listing.
In another report, agents are facing competition when submitting an offer for clients — up over 66%. Bidding wars are just intensifying, as I am seeing this now in the communities I represent on the Westside, which include Beverly Hills, Beverly Hills Post Office, Bel-Air/Holmby Hills, Westwood/Century City, and Brentwood.
The list price is just the starting point. Bidding wars have grown so common that nearly half of homes on the market are being sold for more than their list price, according to the latest surveys.
What’s more, bidding wars are the most common reason house hunters who have been searching for at least three months haven’t been able to buy a home. Forty-five (45) % of longtime house hunters say they continue to lose out in bidding wars, which is higher than those who say they cannot find an affordable home (32%), according to a recent analysis from the National Association of Home Builders.
We are seeing this all over. My niece Morgan & her husband, and nephew Connor and his girlfriend all of whom are first time buyers of condos in Vancouver BC, faced multiple offers in their purchases. Morgan & Ben lost their choices about 10 times with the accepted offer price going up as much as $100,000 over the asking price, so at the end of the day, they bought a one bedroom rather than the two they wanted to get into the game. In both cases, they had to buy them with no contingencies, no loan, inspection, nada!
***********************************************************
A lot of Moving Parts
I moved back into my office at Coldwell Banker in Brentwood this week. It feels good to be back there! We have been busy connecting the computers, printer, phones and getting everything set up with all of the wiring changes they made during the remodel. We just hung the art, so now it feels like home again. Also, more people
are coming back into the office to work so I am seeing people that I haven’t seen in a year or so.
In addition, I now have 5 mentees all with different stages of their new careers in selling real estate needing supervision, assistance, guidance and motivation.
Then there is my business which keeps me very busy also. We just closed an escrow the other day with one or two more coming down the pike and a few listings coming up in the next week or so. One of them is the fabulous house at 7950 Electra Dr. in Mount Olympus in the Hollywood Hills. You will be able to see the photos on my web site, caroleschiffer.com as well as through the Multiple Listing in the next day or so. It is priced at $4,195,000 and the house and views are sensational! Please give me a call and I will be more than happy to share all of the information on my listings, 310 442-1384.
In the meantime, please stay safe and keep in touch.
You must be logged in to post a comment.